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Question 16 Chapter 11 – Unimax Publications of Class 11
“Astha” Engineering works purchased a machine on 1st April, 2021 for ₹ 1,80,000 and spent ₹ 20,000 on its installation.
On the 1st January 2022 it purchased another machine for ₹ 2,40,000. On 1st July 2023, the machine purchased on 1st April, 2021 was sold for ₹ 1,45,000. On 1st October,2023 another machine was purchased for ₹ 4,00,000.
Prepare machinery account from 2021 to 2023 after charging depreciation @ 10% p.a. diminishing balance method. Account are closed on 31st December every year.
The solution of Question 16 Chapter 11 – Unimax Publications of Class 11
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/04/21 | To Balance b/d | 1,80,000 | 31/12/21 | By Deprecation A/c | 15,000 | ||
| 01/04/21 | To Bank A/c | 20,000 | 31/12/21 | By Balance C/d | 1,85,000 | ||
| 2,00,000 | 2,00,000 | ||||||
| 01/01/22 | To Balance b/d | 1,85,000 | 31/12/22 | By Deprecation A/c | 42,500 | ||
| 01/01/22 | To Bank A/c | 2,40,000 | 31/12/22 | By Balance C/d | 3,82,500 | ||
| 4,40,000 | 4,40,000 | ||||||
| 01/01/23 | To Balance b/d | 3,82,500 | 31/10/23 | By Bank A/c | 1,45,000 | ||
| 01/01/23 | To Bank A/c | 4,00,000 | 31/10/23 | By Profit & Loss A/c | 13,175 | ||
| 31/12/23 | By Deprecation A/c | 39,925 | |||||
| 31/12/23 | By Balance C/d | 5,84,400 | |||||
| 7,82,500 | 7,82,500 | ||||||
Working Note:
(1) Depreciation on machinery purchased on Apr. 1,2021:
Dep. On Dec.31,2021 = ₹ 15,000
Dep. On Dec.31,2022 = ₹ 18,500
Dep. On Dec.31,2023 = ₹ 8,325
(2) Loss on sales of machinery = ₹ (1,58,175-1,45,000) = ₹ 13,175
(3) Depreciation on machinery purchased on Jan.1,2022:
Dec. on Dec.31,2022 = ₹ 24,000
Dep. on Dec.31,2023 = ₹ 21,600
(4) Depreciation on machinery purchased on Oct.1,2023 on Dec.31,2023 = ₹ 10,000
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