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15.18 Double Entry Book Keeping—CBSE XI

6. On 1st April, 2010, following balance appeared in the books of M/s Krishna Traders:
Furniture Account ` 50,000
Provision for Depreciation of Furniture Account ` 22,000
On 1st October, 2010 a part of Furniture purchased for ` 20,000 on 1st April, 2006 was
sold for ` 5,000. On the same date a new furniture costing ` 25,000 was purchased. The
depreciation was provided @ 10% p.a. on original cost of the asset and no depreciation was
charged on the asset in the year of sale. Prepare ‘Furniture Account’ and ‘Provision for
Depreciation Account’ for the year ending 31st March, 2011.
[Ans.: Loss on Sale of Furniture—` 7,000; Balance of Furniture Account (31.3.2011) ` 55,000;
and Provision for Depreciation Account (31.3.2011) ` 18,250.]
7. A limited company purchased on 1st January, 1999 a plant for ` 38,000 and spent
` 2,000 for carriage and brokerage. On 1st April, 2000 it purchased additional plant costing
` 20,000. On 1st August, 2001 the plant purchased on 1st January, 1999 was sold for ` 25,000.
On the same date, the plant purchased on 1st April, 2000 was sold at a profit of ` 2,800.
Depreciation is provided @ 10% per annum on diminishing balance method every year.
Accounts are closed on 31st December every year. Show the Plant Account for 3 years.
[Ans.: Loss on Sale of Plant I—` 5,510; Sale proceeds of Plant II—` 20,221.]

8. X Ltd. imported a machine on 1st July, 2005 for ` 2,00,000, paid custom duty and freight
` 40,000 and incurred erection charges ` 60,000. Another local machinery costing
` 1,00,000 was purchased on 1st January, 2006. On 1st July, 2007, one-third of the imported
machine got out of order and was sold for ` 40,000. Another machinery was purchased to
replace the same for ` 50,000 on the same date. Depreciation is to be calculated at 20% p.a.
on the Straight Line Method. Accounts are closed each year on 31st December.
Show the Machinery Account and Provision for Depreciation Account for 2005, 2006 and
2007 and Machinery Disposal Account.
[Ans.: Balance of Machinery A/c (31st December, 2007)—` 3,50,000; Provision for
Depreciation A/c (31st December, 2007)—` 1,45,000 (M I—` 1,00,000,
M II—` 40,000; M III—` 5,000) Loss on Sale of Machinery—` 20,000.]
Dr. MACHINERY DISPOSAL ACCOUNT Cr.
Date Particulars ` Date Particulars `
2011 2011
July 1 To Machinery A/c 1,00,000 July 1 By Provision for Depreciation A/c 40,000
(` 30,000 + ` 10,000)
By Bank A/c (Sale) 40,000
By Loss on Sale of Machinery A/c 20,000
(Profit & Loss A/c)
1,00,000 1,00,000
9. R.K. Bros. purchased 3 plants @ ` 3,20,000 each on 1st April, 2011. They charged
depreciation @ 10% p.a. on reducing instalment. On 1st December, 2013, one of the plants
was sold for ` 2,18,000. You are required to prepare Plant Account, Plant Disposal Account,
Provision for Depreciation Account for three years assuming that the accounts are closed
on 31st March every year.
[Ans.: Balance of Plant A/c (31st March, 2014)—` 6,40,000; Provision for Depreciation A/c
(31st March, 2014)—` 1,73,440; Book Value of Plant Sold on 1st December, 2013
` 2,41,920; Loss on Sale of Plant—` 23,920; Total depreciation transferred to
Plant A/c on 1st December, 2013—` 78,080, (i.e., ` 32,000 + ` 28,800 + ` 17,280).]