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M.306 An Aid to Accountancy—CBSE XII

2. Dr. MACHINERY ACCOUNT Cr.

Particulars ` Particulars `
To Balance b/d 6,10,000 By Accumulated Depreciation A/c 35,000
To Bank A/c (Balancing Figure)—Purchase 2,90,000 By Bank A/c (Sale Proceeds) 12,000
By Loss on Sale of Machinery A/c* 3,000
(Statement of Profit and Loss)
By Balance c/d 8,50,000
9,00,000 9,00,000

*CALCULATION OF LOSS ON SALE OF MACHINERY
Particulars `
Book Value of Machinery on the date of Sale (i.e., ` 50,000 – ` 35,000) 15,000
Less: Sale Proceeds (Book Value – 20% = ` 15,000 – ` 3,000) (12,000)
Loss on Sale of Machinery 3,000

3. Dr. ACCUMULATED DEPRECIATION ACCOUNT Cr.
Particulars ` Particulars `
To Machinery A/c (Transfer) 35,000 By Balance b/d 1,10,000
To Balance c/d 1,50,000 By Statement of Profit and Loss A/c 75,000
(Balancing Figure)—Depreciation Provided
1,85,000 1,85,000

4. Dr. 10% NON-CURRENT INVESTMENTS ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 50,000 By Bank A/c (Sale) 36,000
To Gain (Profit) on Sale of Investment A/c 6,000 (` 30,000 + 20% of ` 30,000)
(Statement of Profit and Loss) By Balance c/d 70,000
To Bank A/c (Balancing Figure)—Purchase 50,000
1,06,000 1,06,000

5. Discount on Issue of Debentures and Share Issue Expenses have been written off from Securities Premium Reserve
as per Section 52(2) of the Companies Act, 2013. The balance of ` 5,000 in Securities Premium Reserve is after
writing off Discount on Issue of Debentures and Share Issue Expenses. As such Discount on Issue of Debentures and
Share Issue Expenses have not been written off through Statement of Profit and Loss, they are not adjusted while
calculating operating profit.

6. Dr. SECURITIES PREMIUM RESERVE ACCOUNT Cr.
Particulars ` Particulars `

To Share Issue Expense A/c 5,000 By Equity Shares Allotment A/c 20,000
To Discount on Issue of Debentures A/c 10,000 (20% of ` 1,00,000)
To Balance c/d 5,000
20,000 20,000