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#### Question 1:

Calculate the Rate of Depreciation under Straight Line Method (SLM) from the following:
Purchased a second-hand machine for ₹ 96,000, spent ₹ 24,000 on its cartage, repairs and installation, estimated useful life of machine 4 years. Estimated residual value ₹ 72,000.

#### Page No 14.40:

 Book of X Ltd. Machinery Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2014 2015 April 01 Bank 4,00,000 Mar.31 Depreciation 40,000 April 01 Bank (Erection Expense) 50,000 Balance c/d 4,10,000 4,50,000 4,50,000 2015 2016 April 01 Balance b/d 4,10,000 Mar.31 Depreciation 40,000 Balance c/d 3,70,000 4,10,000 4,10,000 2016 2017 April 01 Balance b/d 3,70,000 Mar.31 Depreciation 40,000 Balance c/d 3,30,000 3,70,000 3,70,000

Calculation of Depreciation:

#### Page No 14.41:

 Furniture Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2012 2013 April 01 Bank (F1) 55,000 March 31 Depreciation (F1) 5,000 March 31 Balance c/d (F1) 50,000 55,000 55,000 2013 2014 April 01 Balance b/d (F1) 50,000 March 31 Depreciation April 01 Bank (F2) 9,500 F1 5,000 F2 900 5,900 March 31 Balance c/d F1 45,000 F2 8,600 53,600 59,500 59,500 2014 2015 April 01 Balance b/d March 31 Depreciation F1 45,000 F1 5,000 F2 8,600 53,600 F2 900 5,900 March 31 Balance c/d F1 40,000 F2 7,700 47,700 53,600 53,600 2015 2016 April 01 Balance b/d March 31 Depreciation F1 40,000 F1 5,000 F2 7,700 47,700 F2 900 Oct. 01 Bank (F3) 8,400 F3 400 6,300 March 31 Balance c/d F1 35,000 F2 6,800 F3 8,000 49,800 56,100 56,100

Working Notes:

#### Question 4:

On 1st April, 2014, A Ltd. purchased a machine for ₹ 2,40,000 and spent ₹ 10,000 on its erection. On 1st October, 2014 an additional machinery costing ₹ 1,00,000 was purchased. On 1st October, 2016, the machine purchased on 1st April, 2014 was sold for ₹ 1,43,000 and on the same date, a new machine was purchased ata cost of ₹ 2,00,000.

Machinery Account

 Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2014 2015 April 01 Bank (M1) 2,50,000 March 31 Depreciation Oct. 01 Bank (M2) 1,00,000 M1 12,500 M2 (6 Months) 2,500 15,000 March 31 Balance c/d M1 2,37,500 M2 97,500 3,35,000 3,50,000 3,50,000 2015 2016 April 01 Balance b/d March 31 Depreciation M1 2,37,500 M1 12,500 M2 97,500 3,35,000 M2 5,000 17,500 March 31 Balance c/d M1 2,25,000 M2 92,500 3,17,500 3,35,000 3,35,000 2016 2016 April 01 Balance b/d Oct. 01 Depreciation (for 6 months) 6,250 M1 2,25,000 Oct. 01 Bank (M1 sold) 1,43,000 M2 92,500 3,17,500 Oct. 01 Profit and Loss (loss on sale) 75,750 2017 July 01 Bank (M3) 2,00,000 March 31 Depreciation M2 5,000 M3 (for 6 months) 5,000 10,000 March 31 Balance c/d M2 87,500 M3 1,95,000 2,82,500 5,17,500 5,17,500 2017 2018 April 01 Balance b/d March 31 Depreciation M2 87,500 M2 5,000 M3 1,95,000 2,82,500 M3 10,000 15,000 March 31 Balance c/d M2 82,500 M3 1,85,000 2,67,500 2,82,500 2,82,500

Working Notes:

1. Calculation of Deprecation

2. Calculation of profit or loss on sale of Machine 1

 Particulars Amount (Rs) Book Value on April 01, 2016 2,25,000 Less: Deprecation for six month (6,250) Book Value on Oct. 01, 2016 2,18,750 Less: Sale Proceeds (1,43,000) Loss on Sale of Machine 75,750

#### Page No 14.41:

 Machinery Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particular J.F. Amount (Rs) 2016 2017 Apr.01 Bank (M1) 50,000 Mar.31 Depreciation Sept 30 Bank (M2) 20,000 M1 5,000 M2 (6 months) 1,000 6,000 Mar.31 Balance c/d M1 45,000 M2 (6 months) 19,000 64,000 70,000 70,000

Note:

Repair and renewal made on December 31, 2016 will not be recorded in Machinery Account because, this repair was made after putting the Machinery into use.

#### Page No 14.41:

 Asset Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2009 2010 April 01 Bank 10,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 9,500 10,500 10,500 2010 2011 April 01 Balance b/d 9,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 8,500 9,500 9,500 2011 2012 April 01 Balance b/d 8,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 7,500 8,500 8,500 2012 2013 April 01 Balance b/d 7,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 6,500 7,500 7,500 2013 2014 April 01 Balance b/d 6,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 5,500 6,500 6,500 2014 2015 April 01 Balance b/d 5,500 Mar.31 Depreciation 1,000 Mar.31 Balance c/d 4,500 5,500 5,500 2015 2016 April 01 Balance b/d 4,500 Mar.31 Depreciation 1,000 Mar.31 Bank 600 Mar.31 Profit and Loss (Loss) 2,900 4,500 4,500

(i) Depreciation Expense for the year ended March 31, 2010 is Rs 1000

(ii) The Net Book Value of the asset on March 31, 2014 is Rs 5,500

(iii) Loss on Sale of the asset on March 31, 2016 is Rs 2,900

#### Page No 14.41:

 Books of Modern Ltd. Machinery Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2013 2014 Aug.01 Bank (M1) 60,000 March 31 Depreciation M1 (for 8 months) 8,000 March 31 Balance c/d 52,000 60,000 60,000 2014 2015 April 01 Balance b/d 52,000 March 31 Depreciation Oct. 01 Bank (M2) 20,000 M1 12,000 M2 (6 months) 2,000 14,000 March 31 Balance c/d M1 40,000 M2 18,000 58,000 72,000 72,000 2015 2015 April 01 Balance b/d June 30 Depreciation (M1) (for 3 months) 3,000 M1 40,000 June 30 Bank (M1) 38,500 M2 18,000 58,000 2016 June 30 Profit and Loss (profit) 1,500 Mar.31 Depreciation (M2) 4,000 Mar.31 Balance c/d 14,000 59,500 59,500

Working Notes

1. Calculation of Annual Depreciation

 Particulars Amount (Rs) Value on Apr 01, 2015 40,000 Depreciation for 3 Months (3,000) Value on June 30, 2015 37,000 Less: Sale of Machine (38,500) Profit on sale of Machine 1 1,500

#### Page No 14.41:

 Books of Sohan Lal & Sons Plant Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2015 2016 July 01 Bank (I) 60,000 March 31 Depreciation (I) for 9 months 4,500 2016 (II) for 3 months 1,000 5,500 Jan. 01 Bank (II) 40,000 March 31 Balance c/d (I) 55,500 (II) 39,000 94,500 1,00,000 1,00,000 2016 2017 April 01 Balance b/d March 31 Depreciation (I) 55,500 (I) 6,000 (II) 39,000 94,500 (II) 4,000 Oct. 01 Bank (III) 20,000 (III) for 6 months 1,000 11,000 March 31 Balance c/d (I) 49,500 (II) 35,000 (III) 19,000 1,03,500 1,14,500 1,14,500 2017 2017 April 01 Balance b/d April 01 Bank 6,000 (I) 49,500 April 01 Profit and Loss (loss)(16,500 – 6,000) 10,500 2018 (II) 35,000 March 31 Depreciation (III) 19,000 1,03,500 (I) 4,000 (II) 4,000 (III) 2,000 10,000 March 31 Balance c/d (I) 29,000 (II) 31,000 (III) 17,000 77,000 1,03,500 1,03,500

Working Notes

1. Calculation of Depreciation

2. Calculation of profit or loss on Sale of Plant I

 Particulars Amount (Rs) 1/3rd of Book Value of Plant I as on April 01, 2017( 49,500 × 1/3) 16,500 Less: Sale of Plant (6,000) Loss on Sale of Plant 10,500

#### Question 9:

A Van was purchased on 1st April, 2015 for ₹ 60,000 and ₹ 5,000 was spent on its repair and registration. On 1st October, 2016 another van was purchased for ₹ 70,000. On 1st April, 2017, the first van purchased on 1st April, 2015 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Van Account from 2015-16 to 2017-18 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

 Van Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2015 2016 April 01 Bank (I) 65,000 March 31 Depreciation (I) 6,500 March 31 Balance c/d (I) 58,500 65,000 65,000 2016 2017 April 01 Balance b/d (I) 58,500 March 31 Depreciation Oct. 01 Bank (II) 70,000 (I) 6,500 (II) (for 6 month) 3,500 10,000 March 31 Balance c/d (I) 52,000 (II) 66,500 1,18,500 1,28,500 1,28,500 2017 2017 April 01 Balance b/d April 01 Bank (I) 45,000 (I) 52,000 April 01 Profit and Loss (Loss on Sale) 7,000 2018 (II) 66,500 1,18,500 March 31 Depreciation April 01 Bank (III) 1,70,000 (II) 7,000 (III) 17,000 24,000 March 31 Balance c/d (II) 59,500 (III) 1,53,000 2,12,500 2,88,500 2,88,500

Working Notes

1. Calculation of Annual Depreciation

2. Calculation of profit or loss on sale of Van (I)

 Particulars Amount (Rs) Book Value on Apr. 01, 2017 52,000 Less: Sale of Van (45,000) Loss on Sale of Van 7,000

#### Page No 14.42:

 Machinery Account Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2013 2014 July 01 Bank (I) 30,000 March 31 Depreciation 2014 Jan. 01 Bank (II) 20,000 I (for 9 months) 2,250 II 500 2,750 March 31 Balanced c/d I 27,750 II 19,500 47,250 50,000 50,000 2014 2015 April 01 Balance b/d March 31 Depreciation I 27,750 I 3,000 II 19,500 47,250 II 2,000 III 500 5,500 Oct. 01 Bank (III) 10,000 March 31 Balance c/d I 24,750 II 17,500 III 9,500 51,750 57,250 57,250 2015 2015 April 01 Balance b/d April 01 Bank I(1/3rd portion) 3,000 I 24,750 April 01 Profit and Loss (Loss on Sale of I) 5,250 2016 II 17,500 March 31 Depreciation III 9,500 51,750 I (on 2/3rd portion) 2,000 II 2,000 III 1,000 5,000 March 31 Balance c/d I (on 2/3rd portion) 14,500 II 15,500 III 8,500 38,500 51,750 51,750

Working Notes

1. Calculation of Depreciation

Calculation of profit or loss on sale of 1/3rd Portion of Machine I

 Particulars Amount (Rs) Book Value of 1/3rd portion of Machine I on April 01, 2015 (24,750 × 1/3) 8,250 Less: Sale Value (3,000) Loss on sale 5,250

#### Page No 14.42:

Books of A. Co. Ltd
 Machinery Dr. Cr. Date Particulars J.F. Amount (Rs) Date Particulars J.F. Amount (Rs) 2012 2013 July 01 Bank (I) (20,000 + 3,000) 23,000 Mar.31 Depreciation 2013 I (for 9 months) 1,725 Jan.01 Bank (II) 12,000 II (for 3 months) 300 2,025 Mar.31 Balance c/d I 21,275 II 11,700 32,975 35,000 35,000 2013 2014 April 01 Balance b/d Mar.31 Depreciation I 21,275 I 2,300 II 11,700 32,975 II 1,200 3,500 Mar.31 Balance c/d I 18,975 II 10,500 29,475 32,975 32,975 2014 2014 April 01 Balance b/d June 30 Bank (II) 8,000 I 18,975 June 30 Depreciation (II) (for 3 months) 300 II 10,500 29,475 June 30 Profit and Loss (Loss) 2,200 July 01 Bank (III) 5,000 2015 July 01 Creditors for plant (III) 10,000 Mar.31 Depreciation I 2,300 III (on 15,000 for 8 months) 1,125 3,425 Balance c/d I 16,675 III 13,875 30,550 44,475 44,475

Working Notes

1. Calculation of Depreciation

2.     Calculation of profit on loss on sale of Machine (II)

 Particulars Amount (Rs) Book Value of Machine (II) on April 01, 2014 10,500 Less: Depreciation for 3 Months (300) Book Value on June 30 10,200 Less: Sale (8,000) Loss on Sale 2,200