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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
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