TS Grewal Accountancy Class 11 Solutions Chapter 11 Depreciation
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Please find the below questions and answers with solutions. You will get all the Class 11 Chapter 11 accounts solutions from this post.
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.
Solution:
Question 2.
On 1st April, 2015, X Ltd. purchased a machine costing ₹ 4,00,000 and spent ₹ 50,000 on its installation. The estimated life of the machinery is 10 years, after which its residual value will be ₹ 50,000 only. Find the amount of annual depreciation according to the Fixed Instalment Method and prepare Machinery Account for t he first three years. The books are closed on 31st March every year.
Solution:
Question 3.
On 1st April, 2014, furniture costing ₹ 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for ₹ 5,000. Additions are made on 1st April 2015 and 1st October, 2017 to the value of ₹ 9,500 and ₹ 8,400 (Residual values ₹ 500 and ₹ 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.
Solution:
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.
Solution:
Question 5.
From the following transactions of a concern, prepare the Machinery Account for the year ended 31st March, 2018:
1st April, 2017 : Purchased a second-hand machinery for ₹ 40,000
1st April, 2017 : Spent ₹ 10,000 on repairs for making it serviceable.
30th September, 2017 : Purchased additional new machinery for ₹ 20,000.
31st December, 2017 : Repairs and renewals of machinery ₹ 3,000.
31st March, 2018 : Depreciate the machinery at 10% p.a.
Solution:
Note :
Repair and renewal made on December 31, 2017 will not be recorded in Machinery Account because, this repair was after putting the Machinery in to use.
Question 6.
An asset was purchased for ₹ 10,500 on 1st April, 2011. The scrap value was estimated to to be ₹ 500 at the end of asset’s 10 years life. Straight Line Method of depreciation was used. The accounting year ends on 31st March every year. The asset was sold for ₹ 600 on 31st March, 2018. Calculate the following.
(i) The Depreciation expense for the year ended 31st March, 2012.
(ii) The net book value of the asset on 31st March, 2016.
(iii) The grain or loss on sale of the asset on 31st March, 2018.
Solution:
(i) Depreciation Expense for the year ended March 31, 2012 = Rs. 1000
(ii) The Net Book Value of the asset on March 31, 2016 = Rs. 5,500
(iii) Loss on Sale of the asset on March 31, 2018 = Rs. 2,900
Question 7.
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.
Solution:
Question 8.
A company whose accounting year is a financial year, purchased on 1st July, 2014 machinery costing ₹ 30,000.
It purchased further machinery on 1st January, 2015 costing ₹ 20,000 and on 1st October, 2015 costing ₹ 10,000.
On 1st April, 2016, one-third of the machinery installed on 1st July, 2014 became obsolete and was sold for ₹ 3,000.
Show how Machinery Account would appear in the books of the company. It being given that machinery was depreciated by Fixed Instalment Method at 10% p.a. What would be the value of Machinery Account on 1st April, 2017?
Solution:
Question 9.
On 1st July, 2015, A Co. Ltd. purchases second-hand machinery for ₹ 20,000 and spends ₹ 3,000 on reconditioning and installing it. On 1st January, 2016, the firm purchases new machinery worth ₹ 12,000. On 30th June, 2017, the machinery purchased on 1st January, 2016, was sold for ₹ 8,000 and on 1st July, 2017, a fresh plant was installed. Payment for this plant was to be made as follows:
1st July, 2017 – ₹ 5,000
30th June, 2018 – ₹ 6,000
30th June, 2019 – ₹ 5,500
Payments in 2018 and 2019 include interest of ₹ 1,000 and ₹ 500 respectively.
The company writes off 10% p.a. on the original cost. The accounts are closed every year on 31st March. Show the Machinery Account for the year ended 31st March, 2018.
Solution:
Question 10.
On 1st April, 2015, Shivam Enterprise purchased a second-hand machinery for ₹ 52,000 and spent ₹ 2,000 on cartage, ₹ 3,000 on unloading, ₹ 2,000 on installation and ₹ 1,000 as brokerage of the middle man. It was estimated that the machinery will have a scrap value of ₹ 6,000 at the end of its useful life, which is 10 years. On 31st December 2015, repairs and renewals amounted to ₹ 2,500 were paid. On 1st October, 2017, this machine was sold for ₹ 30,600 and an amount of ₹ 600 was paid as commission to an agent. Calculate the amount of annual depreciation and rate of depreciation. Also prepare the Machinery Account for first 3 years, assuming that firm follows financial year for accounting.
Solution:
Question 11.
Modern Ltd. purchased a machinery on 1st August, 2015 for ₹ 60,000. On 1st October, 2016, it purchased another machine for ₹ 20,000 plus CGST and SGST @ 6% each. On 30th June, 2017, it sold the first machine purchased in 2015 for ₹ 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery A/c for three years.
Solution:
Question 12.
On 1st July, 2015, Sohan Lal & Sons purchased a plant costing ₹ 60,000. Additonal plant was purchased on 1st January, 2016 for ₹ 40,000 and on 1st October, 2016, for ₹ 20,000, paying CGST and SGST @ 6% each. On 1st April, 2017, one-third of the plant purchased on 1st July, 2015, was found to have become obsolete and was sold for ₹ 6,000, charging CGST and SGST @ 6% each.
Prepare the Plant Account for the first three years in the books of Sohan Lal & Sons. Depreciation is charged @ 10% p.a. on Straight Line Method. Accounts are closed on 31st March each year.
Solution:
Question 13.
A firm purchased a second-hand machine on 1st April, 2015 and paid ₹ 1,40,000 for it. It spent on its overhauling and installation ₹ 20,000. On 1st October, 2015, another machine costing ₹ 80,000 was purchased. On 1st October, 2017, the machine purchased on 1st April, 2015 was disposed off for ₹ 1,04,000, charging CGST and SGST @ 6% each and a new machine costing ₹ 2,00,000 was installed, paying CGST and SGST @ 6% each. Depreciation was provided @ 10% p.a. by the Straight Line Method. Give the Machinery Account and Depreciation Account for 3 years. Firm’s books are closed on 31st March every year.
Solution:
Question 14.
Following balances appear in the books of Rama Bros:
On 1st April, 2015, they decided to sell a machine for ₹ 8,700. This machine was purchased for ₹ 16,000 in April, 2011. Prepare the Provision for Depreciation Account and Machinery Account on 31st March, 2016, assuming the firm has been charging Depreciation at 10% p.a. on Straight Line Method.
Solution:
Question 15.
Following balances appear in the books of Priyank Brothers:
On 1st April, 2016, they decide to sell a machine for ₹ 5,00,000. This machine was purchased for ₹ 7,50,000 on 1st April, 2013. Prepare the Machinery Account and Provisin for Depreciation Account for the year ended 31st March, 2017 assuming that the firm has been charging Depreciation @ 10% p.a. on the Straight Line Method.
Solution:
Question 16.
Following balances appear in the books of X Ltd. as on 1st April, 2017:
Machinery A/c – ₹ 5,00,000
Provision for Depreciation A/c – ₹ 2,25,000
The machinery is depreciated @ 10% p.a. on the Fixed Instalment Method. The accounting year being April-March. On 1st October, 2017, a machinery which was purchased on 1st July, 2014 for ₹ 1,00,000 was sold for ₹ 42,000 plus CGST and SGST @ 6% each and on the same date a new machine was purchased for ₹ 2,00,000 paying IGST @ 12%. Prepare Machinery Account and Provision for Depreciation Account for the year ended 31st March, 2018.
Solution:
Question 17.
A Limited has the following balances on 1st April, 2017:
Machinery A/c – ₹ 2,00,000
Provision for Depreciation A/c – ₹ 90,000
The company charged depreciation @ 10% p.a. on Straight Line Method. Accounts are closed on 31st March every year. On 1st October, 2017, a part of machinery purchased on 1st July, 2014 for ₹ 40,000 was sold for ₹ 18,400, charging CGST and SGST @ 6% each and on the same date a new plant was purchased for ₹ 1,00,000 plus IGST @ 12%.
Prepare Machinery Account and Provision for Depreciation Account for the year ended 31st March, 2018.
Solution:
Question 18.
The original cost of furniture amounted to ₹ 4,000 and it is decided to write off 5% on the original cost as depreciation at the end of each year. Show the Ledger Account as it will appear during the first four years. Show also how the same account will appear if it was decided to write off 5% on the diminishing balance of the asset each year.
Solution:
Question 19.
A boiler was purchased from abroad for ₹ 10,000; shipping and forwarding charges ₹ 2,000, Import duty ₹ 7,000 and expenses of installation amounted to ₹ 1,000.
Calculate the depreciation for the first three years (separately for each year) @ 10% on Diminishing Balance Method.
Solution:
Goods Cost = 10,000 + 2,000 + 7,000 + 1,000 = Rs.20,000
Question 20.
Babu purchased on 1st April, 2016, a machine for ₹ 6,000. On 1st October, 2016, he also purchased another machine for ₹ 5,000. On 1st October, 2017, he sold the machine purchased on 1st April, 2016 for ₹ 4,000.
It was decided that Depreciation @ 10% p.a. was to be written off every year under Diminishing Balance Method.
Assuming the accounts were closed on 31st March every year, show the Machinery Account for the years ended 31st March, 2017 and 2018.
Solution:
Question 21.
Kaushal Traders purchased a second-hand machinery on 1st April, 2015 for ₹ 23,000 and spent ₹ 2,000 on its repair. It was decided to depreciate the machinery @ 20% every year on 31st March at Diminishing Balance Method.
Prepare the Machinery Account from years ended 31st March, 2016 to 2018 and show Profit or Loss as it was sold on 31st March, 2018 for ₹ 10,800.
Solution:
Question 22.
X bought a machine for ₹ 25,000 on which he spent ₹ 5,000 for carriage and freight. ₹ 1,000 for brokerage of the middleman, ₹ 3,500 for installation and ₹ 500 for an iron pad. The machine is depreciated @ 10% every year on Written Down Value basis. After three years, the machine was sold to Y for ₹ 30,500 and ₹ 500 was paid as commission to the broker through whom the sale was effected. Find out the profit and loss on sale of machine.
Solution:
Cost of machinery = 25,000 + 5,000 + 1,000 + 3,500, + 500 = Rs.35,000
Question 23.
A company purchased a machinery for ₹ 50,000 on 1st October, 2015. Another machinery costing ₹10,000 was purchased on 1st December, 2016. On 31st March, 2018, the machinery purchased in 2015 was sold at a loss of ₹ 5,000. The company charges depreciation @ 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare the Machinery Account for 3 years.
Solution:
Question 24.
On 1st April, 2015, a machinery was purchased for ₹ 20,000. On 1st October, 2016 another machine was purchased for ₹ 10,000 and on 1st April, 2017, one more machine was purchased for ₹ 5,000. The firm depreciates its machinery @ 10% p.a. on the Diminishing Balance Method.
What is the amount of Depreciation for the years ended 31st March, 2016; 2017 and 2018? What will be the balance in Machinery Account as on 31st March, 2018?
Solution:
I. Calculation of Depreciation from April 01, 2015 to March 31, 2018
Depreciation Rate : 10% p.a. on Diminishing Balance Method
II. Balance in Machinery Account as on March 31, 2018 will be Rs.27,630
Working Notes: Preparation of Machinery Account
Question 25.
A Machinery was purchased for ₹ 1,80,000 on 1st July, 2015. Depreciation was charged annually @ 10% on Diminishing Balance Method. 1/4th of this Machinery was sold on 1st October, 2017 for 36,000. Prepare Machinery A/c from the year ended 31st March, 2016 to 2018, if the books are closed on 31st March every year.
Solution:
Question 26.
M/s. P & Q purchased machinery for ₹ 40,000 on 1st October, 2015. Depreciation is provided @ 10% p.a. on the Diminishing Balance. On 31st January, 2018, one-fourth of the machinery was found unsuitable and disposed off for ₹ 5,600. On the same date new machinery at a cost of ₹ 15,000 was purchased. Write up the Machinery account for the years ended 31st March, 2016, 2017 and 2018. Accounts are closed on 31st March each year.
Solution:
Question 27.
A company purchased on 1st July, 2015 machinery costing ₹ 30,000. It further purchased machinery on 1st January, 2016 costing ₹ 20,000 and on 1st October, 2016 costing ₹ 10,000. On 1st April, 2017, one-third of the machinery installed on 1st July, 2015 became obsolete and was sold for ₹ 3,000. The company follows financial year as accounting year.
Show how the machinery Account would appear in the books of company if depreciation is charged @ 10% p.a. on Written Down Value Method.
Solution:
Question 28.
On 1st October, 2010, Meenal Sharma bought a machine for ₹ 25,000 on which he spent ₹ 5,000 for carriage and freight; ₹ 1,000 for brokerage of the middle-man, ₹ 4,000 for installation. The machine is depreciated @ 10% p.a. on written down value basis. On 31st March, 2013 the machine was sold to Deepa for ₹ 30,500 and ₹ 500 was paid as commission to broker through whom the sales was effected. Find out the profit or loss on sale of machine if accounts are closed on 31st March, every year.
Solution:
Question 29.
Astha Engineering Works purchased a machine on 1st July, 2015 for ₹ 1,80,000 and spent ₹ 20,000 on its installation.
On 1st April, 2016, if purchased another machine for ₹ 2,40,000. On 1st October, 2017, the machine purchased on 1st July, 2015 was sold for ₹ 1,45,000. On 1st January, 2018, another machine was purchased for ₹ 4,00,000 plus IGST @ 12%.
Prepare the Machinery Account for the years ended 31st March, 2016 to 2018 after charging Depreciation @ 10% p.a. by Diminishing Balance Method.
Accounts are closed on 31st March every year.
Solution:
Question 30.
A firm purchased on 1st April, 2015 certain machinery for ₹ 5,82,000 and spent ₹ 18,000 on its installation. On 1st October, 2015, additional machinery costing ₹ 2,00,000 was purchased. On 1st October, 2017, the machinery purchased on 1st April, 2015 was auctioned for ₹ 2,86,000 plus CGST and SGST @ 6% each and a new machinery for ₹ 4,00,000, plus IGST @ 12% was purchased on the same date. Depreciation was provided annually on 31st March at the rate of 10% p.a. on the Written Down Value Method. Prepare the Machinery Account for the three years ended 31st March, 2018.
Solution:
Question 31.
Shakti Cements purchased on 1st April, 2015 a plant for ₹ 80,000. On 1st July, 2016, it purchased additional plant costing ₹ 48,000. On 1st December, 2017, the plant purchased on 1st April, 2015 was sold for ₹ 42,000 plus IGST @ 12% and on the same date a fresh plant was purchased for ₹ 75,000 plus CGST and SGST @ 6% each. Depreciation is provided at 10% p.a. on the Diminishing Balance Method. Accounts are closed on 31st March each year. Show the plant Account for 3 years (along with working notes).
Solution:
Question 32.
Following balances appear in the books of M/s. Amrit as on 1st April, 2017:
2017 1st April
Machinery A/c – ₹ 60,000
Provision for Depreciation A/c – ₹ 36,000
On 1st April, 2017, they decided to dispose off a machinery for ₹ 8,400 which was purchased on 1st April, 2013 for ₹ 16,000.
You are required to prepare the Machinery A/c, Provision for Depreciation A/c and Machinery Disposal A/c for the year ended 31st March, 2018. Depreciation was charged at 10% on Cost following SLM.
Solution:
Question 33.
On 1st October, 2011, X Ltd. purchased a machinery for ₹ 2,50,000. A part of machinery which was purchased for ₹ 20,000 on 1st October, 2011 became obsolete and was disposed off on 1st January, 2014 (having a book value ₹ 17,100 on 1st April, 2013) 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.
Solution:
Question 34.
Sharma & Co. whose books are closed on 31st March, purchased a machinery for ₹ 1,50,000 on 1st April, 2015, Additional machinery was acquired for ₹ 50,000 on 1st October, 2015. Certain machinery which was purchased for ₹ 50,000 on 1st October, 2015 was sold for ₹ 40,000 on 30th September, 2017.
Prepare the Machinery Account and Accumulated Depreciation Account for all the years up to the year ended 31st March, 2018. Depreciation is charged @ 10% p.a. on Straight Line Method. Also, show the Machinery Disposal Account.
Solution:
Question 35.
On 1st April, 2015, Amit Kumar purchased five machines for ₹ 60,000 each. Depreciation @ 10% p.a. on initial cost has been charged from the Profit and Loss Account and credited to Provision for Depreciation Account.
On 1st April, 2016, one machine was sold for ₹ 50,000 and on 1st April, 2017 another machine was sold for ₹ 50,000. An improved model costing ₹ 1,00,000 was purchased on 1st October, 2016. IGST was paid @ 12%. Amit Kumar closes his books on 31st March each year.
You are required to show:
(i) Machinery Account:
(ii) Machinery Disposal Account and
(iii) Provision for Depreciation Account for the period of three accounting years ended 31st March, 2018.
Solution:
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