Page 129 - ISCDEBK-XI

15.14 Double Entry Book Keeping—ISC XI

3. Calculation of Profit/Loss on Sale of Machine: `
Cost on 1st April, 2014 40,000
Less: Depreciation for 2014–15 4,000
Book Value on 1st April, 2015 36,000
Less: Depreciation for 2015–16 3,600
Book Value on 1st April, 2016 32,400
Less: Depreciation for 2016–17 for 6 months 1,620
Book Value as on 30th September, 2016 30,780
Less: Sale Price 29,000
Loss on Sale of Machine 1,780

4. Calculation of Book Value of Machinery (other than scrapped) (After Rectification of Errors) As on
1st April 2016: `
Unadjusted Book Value as on 1st April, 2016 2,98,000
Add: Book Value of machine purchased on 1st January, 2015 (WN 2) 11,232
3,09,232
Less: Book Value of repairs wrongly debited to Machinery A/c (WN 1) 25,650
2,83,582
Less: Book Value of Machine Sold (WN 3) 32,400
2,51,182

5. Calculation of Depreciation for 2016–17: `
A. On Old Machine (10% on ` 2,51,182) (WN 4) 25,118
B. On New Machine (` 61,000 ×10/100 × 6/12) 3,050
28,168

Illustration 10.
Gupta & Co. closes its accounts on 31st March, every year. It purchased the machineries as follows:

(i) Purchased machinery costing ` 1,20,000 on 1st July, 2014.
(ii) On 1st October, 2014, some machines purchased costing ` 1,20,000.
(iii) On 1st October, 2015, again purchased some machinery costing ` 20,000.

(iv) On 1st January, 2017, purchased a new machine for ` 60,000.
(v) A machine costing ` 40,000 which was purchased on 1st July, 2014 was sold for ` 12,000
on 1st April, 2016.
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(vi) It charges depreciation @ 33 % on the Written Down Value Method.
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(vii) It is the practice to charge depreciation for the full year even if the machinery is used
for a part of the year.
Prepare the Machinery Account in the books of Gupta & Co. for three years ending
31st March, 2017.