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Question 10 Chapter 11 – Unimax Publications of Class 11
X Ltd. has imported a machinery on 1st July, 2021 for ₹ 1,28,000, paid customs duty and freight ₹ 65,000 and incurred erection charges ₹ 48,000. Another local machinery costing ₹ 80,000 was purchased on January 1, 2022. On 1st July 2022, a portion of the imported machinery (value one-third) got out of order and was sold for ₹ 27,840. Another machinery was purchased to replace the same for ₹ 40,000 on 1.7.19. depreciation is being provided @ 20% p.a. on original cost of the machinery. Show machinery account for 2021, 2022 and 2023 ending as on 31Dec. each year.
The solution of Question 10 Chapter 11 – Unimax Publications of Class 11
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/07/21 | To Bank A/c | 1,28,000 | 31/12/21 | By Deprecation A/c | 24,000 | ||
| 01/07/21 | To Bank A/c | 64,000 | 31/12/21 | By Balance C/d | 2,16,000 | ||
| 01/07/21 | To Bank A/c | 48,000 | |||||
| 2,40,000 | 2,40,000 | ||||||
| 01/01/18 | To Balance b/d | 2,16,000 | 01/12/23 | By Deprecation A/c | 64,000 | ||
| 01/01/18 | To Bank A/c | 80,000 | 31/12/23 | By Balance C/d | 2,32,000 | ||
| 2,96,000 | 2,96,000 | ||||||
| 01/01/23 | To Balance b/d | 2,32,000 | 01/07/23 | By Bank A/c | 27,840 | ||
| 01/07/23 | To Bank A/c | 40,000 | 01/07/23 | By Profit & Loss A/c | 20,160 | ||
| 31/12/23 | By Deprecation A/c | 60,000 | |||||
| 31/12/23 | By Balance C/d | 1,64,000 | |||||
| 2,72,000 | 2,72,000 | ||||||
Working Note:
(1) Annual depreciation on imported machinery purchased on July 1,2021 = ₹ 48,000.
(2) Annual depreciation on machinery purchased on Jan.1, 2022 = ₹ 16,000.
(3) Book value of one third part of imported machine, on date July 1,2022 = ₹ 48,000.
(4) Loss on sale of machinery = ₹ (48,000-27,840) = ₹ 20,160.
(5) Annual depreciation on machinery purchased on July 1,2023 = ₹ 8,000.
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