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XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2007. On 1st April 2008 an Extension
was made to the above building by spending ₨4,00,000. On 1st October 2009 half of the Building was sold
for ₨5,60,000 and brokerage at 2% of the selling price was paid. Depreciation in charged on 31st March every
year @ 10% p.a. under diminishing balance method.
Prepare Building Account and Depreciation Account for 2007-08, 2008-09 and 2009-10?
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XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2...
Building Account
- 1st July 2007: Purchase of building
- Debit: Building Account - ₨8,00,000
- 1st April 2008: Extension of building
- Debit: Building Account - ₨4,00,000
- Total Cost of Building = ₨12,00,000
- 1st October 2009: Sale of half the building
- Selling Price: ₨5,60,000
- Less: Brokerage (2% of ₨5,60,000) = ₨11,200
- Net Sale Proceeds = ₨5,60,000 - ₨11,200 = ₨5,48,800
- Credit: Building Account (Half of Total Cost) = ₨6,00,000
Depreciation Account
- Depreciation Calculation:
- For 2007-08:
- Depreciation = 10% of ₨8,00,000 = ₨80,000
- For 2008-09:
- Written Down Value (WDV) = ₨8,00,000 - ₨80,000 + ₨4,00,000 (Extension) = ₨11,20,000
- Depreciation = 10% of ₨11,20,000 = ₨1,12,000
- For 2009-10:
- WDV = ₨11,20,000 - ₨1,12,000 = ₨10,08,000 (after depreciation, before sale)
- Half of Building sold; Depreciation on half = 10% of ₨10,08,000/2 = ₨50,400
Summary of Accounts
- Building Account:
- Debit: Total = ₨12,00,000
- Credit: Sale (Half Building) = ₨6,00,000
- Net Total = ₨6,00,000 (Remaining Building)
- Depreciation Account:
- 2007-08: ₨80,000
- 2008-09: ₨1,12,000
- 2009-10: ₨50,400
This systematic approach to accounting for the building and depreciation ensures accurate financial records while reflecting the changes in asset value over time.
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XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2007. On 1st April 2008 an Extension was made to the above building by spending ₨4,00,000. On 1st October 2009 half of the Building was sold for ₨5,60,000 and brokerage at 2% of the selling price was paid. Depreciation in charged on 31st March every year @ 10% p.a. under diminishing balance method. Prepare Building Account and Depreciation Account for 2007-08, 2008-09 and 2009-10?
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XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2007. On 1st April 2008 an Extension was made to the above building by spending ₨4,00,000. On 1st October 2009 half of the Building was sold for ₨5,60,000 and brokerage at 2% of the selling price was paid. Depreciation in charged on 31st March every year @ 10% p.a. under diminishing balance method. Prepare Building Account and Depreciation Account for 2007-08, 2008-09 and 2009-10? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2007. On 1st April 2008 an Extension was made to the above building by spending ₨4,00,000. On 1st October 2009 half of the Building was sold for ₨5,60,000 and brokerage at 2% of the selling price was paid. Depreciation in charged on 31st March every year @ 10% p.a. under diminishing balance method. Prepare Building Account and Depreciation Account for 2007-08, 2008-09 and 2009-10? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for XYZ &Company, Jalgoan purchased a building for ₨8,00,000 on 1st July 2007. On 1st April 2008 an Extension was made to the above building by spending ₨4,00,000. On 1st October 2009 half of the Building was sold for ₨5,60,000 and brokerage at 2% of the selling price was paid. Depreciation in charged on 31st March every year @ 10% p.a. under diminishing balance method. Prepare Building Account and Depreciation Account for 2007-08, 2008-09 and 2009-10?.
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