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15.8 Double Entry Book Keeping—CBSE XI
Dr. DEPRECIATION ACCOUNT Cr.
Date Particulars ` Date Particulars `
2022 2022
Dec. 31 To Machinery A/c 3,102 Dec. 31 By Profit & Loss A/c 3,102
2023 2023
Dec. 31 To Machinery A/c 7,517 Dec. 31 By Profit & Loss A/c 7,517
Notes:
1. Calculation of Depreciation for the year 2022: `
Depreciation on ` 32,600 for 7 months @ 10% 1,902
Depreciation on ` 48,000 for 3 months @ 10% 1,200
3,102
2. Calculation of Depreciation for the year 2023:
Depreciation on ` 48,000 for full year @ 10% 4,800
Depreciation on ` 32,600 for 10 months @ 10% 2,717
7,517
3. Calculation of profit /loss on Sale of Machine:
Value of the machine on 1st April, 2022 32,600
Less: Depreciation for 7 months @ 10% 1,902
Book Value on 1st January, 2023 30,698
Less: Depreciation for 10 months @ 10% 2,717
Book Value of the machine on the date of sale 27,981
Less: Sale Proceeds 27,400
Loss on Sale of Machine 581
6. You are given the following balances as on 1st April, 2023:
Machinery A/c ` 5,00,000
Provision for Depreciation A/c ` 1,16,000
Depreciation is charged on machinery @ 20% p.a. by the Diminishing Balance
Method. A piece of machinery purchased on 1st April, 2021 for ` 1,00,000 was sold
on 1st October, 2023 for ` 60,000. Prepare Machinery Account and Provision for
Depreciation Account for the year ended 31st March, 2024. Also, prepare Machinery
Disposal Account.
Solution:
Dr. MACHINERY ACCOUNT Cr.
Date Particulars ` Date Particulars `
2023 2023
April 1 To Balance b/d 5,00,000 Oct. 1 By Machinery Disposal A/c 1,00,000
2024
March 31 By Balance c/d 4,00,000
5,00,000 5,00,000
2024
April 1 To Balance b/d 4,00,000