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Question 14 Chapter 11 – Unimax Publications of Class 11
M/s Krishana publication purchased machinery for ₹ 40,000 on 1.7.2021. Depreciation is provided @ 10% p.a. on Diminishing balance. On 31.10.2023 one -fourth of the machinery was found unsuitable and disposed off at ₹ 5,600. On the same date new machinery at a cost of ₹ 15,000 was purchased. Write up the machinery account from 2021 to 2023. The account are closed on 31 December every year
The solution of Question 14 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 Balance b/d | 40,000 | 31/12/21 | By Deprecation A/c | 2,000 | ||
| 31/12/21 | By Balance C/d | 38,000 | |||||
| 40,000 | 40,000 | ||||||
| 01/01/22 | To Balance b/d | 38,000 | 31/12/22 | By Deprecation A/c | 3,800 | ||
| 31/12/22 | By Balance C/d | 34,200 | |||||
| 38,000 | 38,000 | ||||||
| 01/01/23 | To Balance b/d | 38,000 | 31/10/23 | By Bank A/c | 5,600 | ||
| 01/01/23 | To Bank A/c | 15,000 | 31/10/23 | By Profit & Loss A/c | 2,237.5 | ||
| 31/12/23 | By Deprecation A/c | 3,527.5 | |||||
| 31/12/23 | By Balance C/d | 37,835 | |||||
| 49,200 | 49,200 | ||||||
Working Note:
(1) Annual depreciation on machinery purchased on July 1,2021
Dep. on Dec. 31,2021 = ₹ 2,000
Dep. On Dec. 31,2022 = ₹ 3,800
Dep. On Dec. 31,2023 = ₹ 3,277.5
(2) Book value of one forth machinery sold, at the time of sale = ₹ 7,837.5
(3) Loss of on sale of machinery = ₹ (7,837.5-5,600) = ₹ 2,237.5
(4) Dep. On new machinery purchased on Oct.31,2023 at date 31.1.2023 = ₹ 250.
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