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Depreciation 15.15
Note: Calculation of Profit and Loss on Sale of Machine (I, Part) `
Book value of Machine (1st April, 2021) 30,000
Less: Depreciation charged (` 3,000 + ` 3,000 + ` 750*) 6,750
Book value on 1st July, 2023 (Date of Sale) 23,250
Less: Sale Proceeds 16,000
Loss on Sale of Machinery 7,250
*` 30,000 × 10/100 × 3/12 = ` 750.
11. On 1st April, 2021, Z Ltd. purchased machinery for ` 1,20,000 and on
30th September, 2022, it acquired additional machinery for ` 20,000. On
30th June, 2023 one of the original machine (purchased on 1st April, 2021) which
had cost ` 5,000 was found to have become obsolete and was sold as scrap for
` 500. On the same date a new machine was purchased for ` 8,000. Depreciation
is to be charged @ 15% p.a. on written down value. Accounts are closed on
31st March each year. Show Machinery Account for the first three years.
(KVS 2015, Modified)
Solution:
Dr. MACHINERY ACCOUNT Cr.
Date Particulars ` Date Particulars `
2021 2022
April 1 To Bank A/c—Mach I 1,20,000 March 31 By Depreciation A/c—Mach I 18,000
March 31 By Balance c/d— Mach I 1,02,000
1,20,000 1,20,000
2022 2023
April 1 To Balance b/d— Mach I 1,02,000 March 31 By Depreciation A/c:
Sep. 30 To Bank A/c—Mach II 20,000 —Mach I 15,300
—Mach II 1,500 16,800
March 31 By Balance c/d:
—Mach I 86,700
—Mach II 18,500 1,05,200
1,22,000 1,22,000
2023 2023
April 1 To Balance b/d: June 30 By Depreciation A/c 135
—Mach I 86,700 —Mach I (Sold part)
—Mach II 18,500 1,05,200 June 30 By Bank A/c 500
June 30 To Bank A/c—Mach III 8,000 June 30 By Loss on Sale of Machinery A/c 2,978
(Profit & Loss A/c) (Note)
2024 By Depreciation A/c:
March 31 —Mach I 12,463
—Mach II 2,775
—Mach III 900 16,138
March 31 By Balance c/d:
—Mach I 70,624*
—Mach II 15,725
—Mach III 7,100 93,449
1,13,200 1,13,200
*` 86,700 – ` 3,613 (sold) – ` 12,463 (Depreciation) = ` 70,624.