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15.12                                                  Double Entry Book Keeping—CBSE XI

                     Dr.                      PROVISION FOR DEPRECIATION ACCOUNT                      Cr.
                     Date     Particulars                `     Date     Particulars                `
                     2023                                       2023
                     Dec.  31  To  Machinery Disposal A/c (WN 3)   9,722   April   1  By  Balance b/d  37,400
                                                                Dec.  31  By  Depreciation A/c      2,860
                     2024                                       2024
                     March  31  To  Balance c/d         36,917   March  31  By  Depreciation A/c (WN 2)      6,379
                                                        46,639                                     46,639

                     Dr.                         MACHINERY DISPOSAL ACCOUNT                           Cr.
                     Date     Particulars                `     Date     Particulars                `
                     2023                                       2023
                     Dec.  31  To  Machinery A/c        45,000   Dec.  31  By  Bank A/c (Sale Proceeds)      23,600
                                                                        By  Provision for Depreciation A/c    9,722
                                                                        By  Loss on Sale of Machinery A/c    11,678
                                                                           (Profit & Loss A/c) (WN 1)
                                                        45,000                                     45,000

                                                BALANCE SHEET as at 31st March, 2024
                     Liabilities                         `     Assets                              `
                                                                Machinery                 1,17,000
                                                                Less:  Provision for Depreciation   36,917   80,083

                     Working Notes:
                      1.  Calculation of profit or loss on Sale of Machinery on 31st December, 2023:   `
                         1st September, 2021      Purchased                                        45,000
                         31st March, 2022         Less:  Depreciation @ 10% p.a. for 7 months       2,625
                         1st April, 2022          Book Value                                       42,375
                         31st March, 2023         Less:  Depreciation @ 10% p.a.                    4,237
                         1st April, 2023          Book Value                                       38,138
                         31st December, 2023      Less:  Depreciation @ 10% p.a. for 9 months       2,860
                                                  Book Value on the date of sale                   35,278
                                                  Less:  Sale Proceeds                             23,600
                                                  Loss on sale of machinery                        11,678

                      2.  Calculation of depreciation on the remaining machinery:
                         Written down value of Machinery Account balance on 1st April, 2023 (` 94,000 – ` 37,400)   56,600
                        Less:  Book value (on 1st April, 2023) of the machine sold (as per WN 1)   38,138
                         Book value of the remaining old machinery                                 18,462
                         Depreciation on the remaining old machinery of ` 18,462 @ 10% p.a.         1,846
                         Depreciation on the machine purchased for ` 68,000 on 31st July, 2023 @ 10% p.a.
                         for 8 months                                                               4,533
                                                                                                    6,379
                      3.  Accumulated depreciation balance of the machine sold transferred from Provision for Depreciation Account
                        to Machinery Disposal Account = ` 2,625 + ` 4,237 + ` 2,860 = ` 9,722.
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