Page 115 - debkxi

15.10 Double Entry Book Keeping—CBSE XI

Solution:
Dr. MACHINERY ACCOUNT Cr.
Date Particulars ` Date Particulars `
2023 2023
Jan. 1 To Balance b/d (cost) 9,82,000 July 1 By Machinery Disposal A/c 3,88,000
June 1 To Bank A/c—Purchase 3,20,000 Dec. 31 By Balance c/d 9,44,000
To Cash A/c—Carriage and
Installation 30,000
13,32,000 13,32,000
2024
Jan. 1 To Balance b/d 9,44,000

Dr. PROVISION FOR DEPRECIATION ACCOUNT Cr.
Date Particulars ` Date Particulars `
2023 2023
July 1 To Machinery Disposal A/c (WN 2) 81,140 Jan. 1 By Balance b/d 2,76,000
Dec. 31 To Balance c/d 2,69,726 July 1 By Depreciation A/c 16,150
Dec. 31 By Depreciation A/c (Note 2) 58,716
3,50,866 3,50,866
2024

Jan. 1 By Balance b/d 2,69,726
Dr. MACHINERY DISPOSAL ACCOUNT Cr.
Date Particulars ` Date Particulars `
2023 2023
July 1 To Machinery A/c 3,88,000 July 1 By Provision for Depreciation A/c 81,140
By Bank A/c—Sale 2,15,000
By Loss on Sale of Machinery A/c 91,860
(Profit & Loss A/c) (WN 1)
3,88,000 3,88,000

Working Notes:
1. Calculation of Profit/Loss on Sale of Machinery on 1st July, 2023: `
Book Value on 1st April, 2021 3,88,000
Less: Depreciation for 9 months @ 10% p.a. 29,100
Book Value on 1st January, 2022 3,58,900
Less: Depreciation for full year @ 10% p.a. 35,890
Book Value on 1st January, 2023 3,23,010
Less: Depreciation for 6 months @ 10% p.a. 16,150
Book Value on 1st July, 2023 3,06,860
Less: Sale proceeds 2,15,000
Loss on sale of Machinery 91,860
2. Total depreciation charged on the machine sold = ` (29,100 + 35,890 + 16,150)
= ` 81,140.