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Question 18 Chapter 11 – Unimax Publications of Class 11
A company whose accounting year is the calendar year purchased on 1st April, 2017 machinery costing ₹ 30,000. It further purchased machinery on 1st Oct.2017 costing ₹ 20,000 and on 1st July, 2018 costing ₹ 10,000.
On 1st Jan., 2019 one third of the machinery installed on 1st April, 2017 become obsolete and was sold for ₹ 3,000.
Show how the machinery account would appear in the books of company if depreciation is charges at 10% p.a. on written down value method.
The solution of Question 18 Chapter 11 – Unimax Publications of Class 11
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/04/17 | To Bank A/c | 30,000 | 31/12/17 | By Deprecation A/c | 2,750 | ||
| 01/10/17 | To Bank A/c | 20,000 | 31/12/17 | By Balance C/d | 47,250 | ||
| 50,000 | 50,000 | ||||||
| 01/01/18 | To Balance b/d | 47,250 | 31/12/18 | By Deprecation A/c | 5,225 | ||
| 01/07/18 | To Bank A/c | 10,000 | 31/12/18 | By Balance C/d | 52,025 | ||
| 57,250 | 57,250 | ||||||
| 01/01/19 | To Balance b/d | 52,025 | 31/10/19 | By Bank A/c | 3,000 | ||
| 31/10/19 | By Profit & Loss A/c | 5,325 | |||||
| 31/12/19 | By Deprecation A/c | 4,370 | |||||
| 31/12/19 | By Balance C/d | 39,330 | |||||
| 52,025 | 52,025 | ||||||
Working Notes:
(1) Dep. On machinery purchased on Apr.1,2017:
Dep. On 31/12/2017 = ₹ 2,250
Dep. On 31/12/2018 = ₹ 2,775
Dep. On 31/12/2019 = ₹ 1,665
(2) Book value of one third machinery purchased = ₹ 8,325.
(3) Loss on sale of machinery = ₹ (8,325-3,000) = ₹ 5,325
(4) Dep. On machinery purchased on oct.1,2018:
Dep. on 31/12/2017 = ₹ 500
Dep. On 31/12/2018 = ₹ 1,950
Dep. On 31/12/2019 = ₹ 1,755
(5) Dep. On machinery purchased on July 1,2018.
Dep. On 31/12/2018 = ₹ 500
Dep. On 31/12/2019 = ₹ 950
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