Page 127 - ISCDEBK-XI

15.12 Double Entry Book Keeping—ISC XI

Solution:
Dr. MACHINERY ACCOUNT Cr.
Date Particulars ` Date Particulars `
2019 2019
Jan. 1 To Balance b/d 3,80,000 June 30 By Provision for Depreciation A/c 19,000
(` 2,40,000 + ` 80,000 June 30 By Bank A/c (Sale) 1,800
+ ` 60,000) Nov. 30 By Provision for Depreciation A/c 17,100
June 30 To Gain on Sale of Machinery A/c 800 Nov. 30 By Bank A/c (Sale) 10,000
(Profit & Loss A/c) Nov. 30 By Loss on Sale of Machine A/c 2,900
Nov. 30 To Bank A/c 90,000 Dec. 31 By Balance c/d 4,20,000
4,70,800 4,70,800

Dr. PROVISION FOR DEPRECIATION ACCOUNT Cr.
Date Particulars ` Date Particulars `
2019 2019
June 30 To Machinery A/c 19,000 Jan. 1 By Balance b/d
(` 20,000 × 95/100) (` 2,28,000 + ` 68,400 + ` 28,500) 3,24,900
Nov. 30 To Machinery A/c 17,100 Nov. 30 By Depreciation A/c (Mach. III) 2,850
(` 14,250 + ` 2,850) Dec. 31 By Depreciation A/c (WN 4):
Dec. 31 To Balance c/d 3,10,650 Mach. I 7,600
Mach. III 2,850
Mach. IV 8,550 19,000
3,46,750 3,46,750

Working Notes:
1. Depreciation Balance on 1st January, 2019 `
(a) Machinery Purchased in 2007 or before 95% of ` 2,40,000 2,28,000
(b) Machinery Purchased in 2010
95 9
Depreciation for 9 Years = × ` 80,000 × 68,400
100 10
(c) Machinery Purchased in 2014
95 5
Depreciation for 5 years = × ` 60,000 × 28,500
100 10
2. Depreciation on Machinery Sold on 30th June, 2019 `
Original Value 20,000
95
Depreciation = × ` 20,000 19,000
100
3. Depreciation on Machinery Sold on 30th November, 2019 `
Original Value 30,000
95
Total Depreciation for 10 years = × ` 30,000 28,500
100
5
Depreciation Charged up to 2018 for 5 Years = × ` 28,500 14,250
10
1
Depreciation for 2019 = × ` 28,500 2,850
10
Depreciation on machinery sold on 30th November, 2019 (` 14,250 + ` 2,850) 17,100