# Depreciation (Part - 4) Notes | Study DK Goel Solutions - Class 11 Accountancy - Commerce

## Commerce: Depreciation (Part - 4) Notes | Study DK Goel Solutions - Class 11 Accountancy - Commerce

The document Depreciation (Part - 4) Notes | Study DK Goel Solutions - Class 11 Accountancy - Commerce is a part of the Commerce Course DK Goel Solutions - Class 11 Accountancy.
All you need of Commerce at this link: Commerce

Page No 16.59:
Question 29:

Binny Textiles Ltd. which depreciates its machinery at 20% p.a. on diminishing balance method, purchased a machine for ₹ 6,00,000 on 1st October, 2010. It closes its books on 31st March every year. On 1st January, 2012, it purchased another machine for ₹ 1,50,000. On 1st December, 2012, one-third of the machinery purchased on 1st October, 2010 was sold for ₹ 80,000.
You are required to prepare Machinery A/c and Provision for Depreciation A/c for the relevant years.

Working Note: Calculation of Profit & Loss on Sale of M1

Note: In order to make easy calculation, machinery purchased on Apr. 01, 2012 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 2,00,000 (1/3rd  value of machinery, sold for Rs 80,000 on Dec. 01, 2012)
M2: Rs 4,00,000 (2/3rd  value of machinery)

Question 30:
The following balances appear in the books of Y Ltd:

 ₹ Machinery A/c as on 1-4-2014 8,00,000 Provision for Depreciation A/c as on 1-4-2014 3,10,000

On 1-7-2014, a machinery which was purchased on 1-4-2011 for ₹ 1,20,000 was sold for ₹ 50,000 and on the same date another machinery was purchased for ₹ 3,20,000.

The firm has been charging depreciation at 15% p.a. on Original Cost Method and closes its books on 31st March every year. Prepare the Machinery A/c and Provision for Depreciation A/c for the year ending 31st March 2015.

Working Notes: WN1: Calculation of Profit & Loss on Sale

WN2: Depreciation charged during the year

Question 31:
On 1st April, 2010, following balances appeared in the books of M/s Krishna Traders:

 ₹ Furniture Account 50,000 Provision for Depreciation on 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.

Working Notes: WN1: Calculation of Profit & Loss on Sale

WN2: Depreciation charged during the year

Page No 16.60:
Question 32:
Books of Mumbai Chemicals Ltd. showed the following balances on 1st April 2012:

 Machinery A/c ₹ 10,00,000 Provision for Depreciation A/c ₹ 4,05,000

On 1st April, 2012, a machine which had a cost of ₹ 2,00,000 on 1st October, 2009 was sold for ₹ 80,000. The firm writes off depreciation @ 10% p.a. under the Reducing Balance Method and its accounts are made up on 31st March each year. You are required to prepare the Machinery A/c and Provision for Depreciation A/c for the year ending 31st March, 2013.

Working Notes:WN1: Calculation of Profit & Loss on Sale

WN2: Calculation of Depreciation on remaining value of Machinery

Page No 16.60:
Question 33:
On 1st July, 2010, X Ltd. purchased a machinery for ₹ 15,00,000. Depreciation is provided @ 20% p.a. on the original cost of the machinery and books are closed on 31st March each year. On 31st May, 2012, a part of this machine purchased on 1st July 2010 for ₹ 3,60,000 was sold for ₹ 2,40,000 and on the same date new machinery was purchased for ₹ 4,20,000. You are required to prepare (a) Machinery Account, (b) Provision for Depreciation Account, and (c) Machinery Disposal Account.

Working Notes: WN1: Calculation of Profit & Loss on Sale

WN2: Depreciation charged during the year

Question 34:
ABC Ltd. purchased on 1st April 2006 a small plant for ₹ 1,00,000. On 1st October 2006 an additional plant was purchased costing ₹ 50,000. On 1st October 2007 the plant purchased on 1st April 2006, having become obsolete, was sold for ₹ 40,000.

Depreciation is provided @10% p.a. on original cost on 31st March every year. Show the plant A/c, Provision for Depreciation A/c and Plant Disposal A/c for the Years 2006-07 and 2007-08.

Working Notes: WN1: Calculation of Profit & Loss on Sale

WN2Depreciation charged during the year

Question 35:
On 1st September 2011, Gopal Ltd. purchased a plant for ₹ 10,20,000. On 1st July 2012 another plant was purchased for ₹ 6,00,000. The firm writes off depreciation @ 10% p.a. on original cost and its accounts are closed every year on 31st March. On 1st October 2014, a part of the second plant purchased on 1st July 2012 for ₹ 1,80,000 was sold for ₹ 1,10,000. On 1st December 2014, another plant was purchased for ₹ 3,00,000.

Prepare Plant Account, Provision for Depreciation Account and Plant Disposal Account.

Working Note: Calculation of Profit & Loss on Sale of P2

Note: In order to make easy calculation, plant purchased on July 01, 2012 has been divided into two parts i.e. P2 and P3.
Thus, P2: Rs 1,80,000 (sold for Rs 1,10,000 on Oct. 01, 2014)
P3: Rs 4,20,000

Question 36:
On 1st June, 2010, Kedarnath Ltd. purchased a machinery for ₹ 27,00,000. Depreciation is provided @ 10% p.a. on diminishing balance method and the books are closed on 31st March each year. On 1st October, 2012, a part of the machinery purchased on 1st June, 2010 for ₹ 6,00,000 was sold for ₹ 3,50,000 and on the same date another machinery was purchased for ₹ 8,00,000. You are required to show (i) Machinery A/c, (ii) Provision for Dep. A/c, and (iii) Machinery Disposal A/c.

Working Note: Calculation of Profit & Loss on Sale of M1

Note: In order to make easy calculation, machinery purchased on June 01, 2010 has been divided into two parts i.e. M1 and M2.
Thus, M1: Rs 6,00,000 (sold for Rs 3,50,000 on Oct. 01, 2012)
M2: Rs 21,00,000

Question 37:
On 1st Jan. 2012, Panjim Dryfruits Ltd. bought a plant for ₹ 15,00,000. The company writes off depreciation @ 20% p.a. on Written Down Value Method and closes its books on 31st March every year. On 1st Oct. 2014, a part of the plant purchased on 1st Jan. 2012 for ₹ 3,00,000 was sold for ₹ 1,75,000. On 1st Jan. 2015 a fresh plant was purchased for ₹ 5,00,000. Prepare Plant A/c, Provision for Dep. A/c and Plant Disposal A/c.

Working Notes: Calculation of Profit & Loss on Sale of P1

Note: In order to make easy calculation, plant purchased on Jan 01, 2012 has been divided into two parts i.e. P1 and P2.
Thus, P1: Rs 3,00,000 (sold for Rs 1,75,000 on Oct. 01, 2014)
P2: Rs 12,00,000

Page No 16.61:
Question 38:
The following balances appear in the books of M/s Amrit:

 ₹ 1st April, 2004 Machinery A/c 60,000 1st April, 2004 Provision for depreciation A/c 36,000

On 1st April, 2004, they decided to dispose off a machinery for ₹ 8,400 which was purchased on 1st April, 2000 for ₹ 16,000.
You are required to prepare Machinery A/c, Provision for Depreciation A/c and Machinery Disposal A/c for 2004-05. Depreciation was charged at 10% p.a on original cost method.

Working Notes: WN1: Calculation of Profit & Loss on Sale

WN2: Calculation of Depreciation on remaining value of Machinery

Page No 16.61:
Question 39:
On 1.10.2008, X Ltd. purchased a machinery for ₹ 2,50,000. A part of machinery which was purchased for ₹ 20,000 on 1.10.2008 became obsolete and was disposed off on 1.1.2011 (having a book value of ₹ 17,100 on 1.4.2010) for ₹ 2,000.

Depreciation is charged @10% annually on written down value. Prepare machinery disposal account and also show your workings. The books being closed on 31st March of every year.

Working Note: Calculation of Profit & Loss on Sale

Question 40:
A limited company purchased on 01-01-2009 a plant for ₹ 38,000 and spent ₹ 2,000 for carriage and brokerage. On 01-04-2010 it purchased additional plant costing ₹ 20,000. On 01-08-2011 the plant purchased on 01-04-2009 was sold for ₹ 25,000. On the same date, the plant purchased on 01-04-2010 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 A/c for 3 years.

Working Notes: WN1: Calculation of Profit & Loss on Sale of P1

WN2: Calculation of Sale Price of P2

Question 41:
On 1st April 2008, Verma & Co. purchased two machines of ₹ 40,000 each. On 1st July 2009 and 1st Oct. 2009 additional machinery were purchased for ₹ 30,000 and ₹ 20,000 respectively. On 1st April 2010 one of the machines purchased on 1st April 2008 became obsolete and was sold for ₹ 21,000. Depreciation is charged @ 15% p.a. on written down value method on 31st March each year. You are required to prepare Machinery Account for 3 years.

Working Notes: Calculation of Profit & Loss on Sale of M1

Question 42:
A Limited purchased a machine on 1st July 2011 for ₹ 3,00,000 and on 1st January 2013 bought another machinery for ₹ 2,00,000. On 1st August 2013 machine bought in 2011 was sold for ₹ 1,60,000. Another machine was bought for ₹ 1,50,000 on 1st October 2013. It was decided to provide depreciation @ 10% p.a. on written down value method assuming books are closed on 31st March each year. Prepare Machinery Account and Provision for depreciation account for 3 years.

Working Notes: Calculation of Profit or Loss on Sale

The document Depreciation (Part - 4) Notes | Study DK Goel Solutions - Class 11 Accountancy - Commerce is a part of the Commerce Course DK Goel Solutions - Class 11 Accountancy.
All you need of Commerce at this link: Commerce
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