Advertisements
Advertisements
प्रश्न
An asset is purchased on 1.1.2016 for ₹ 50,000. Depreciation is to be provided annually according to the straight-line method. The useful life of the asset is 10 years and its residual value is ₹ 10,000. Accounts are closed on 31st December every year. You are required to find out the rate of depreciation and give journal entries for first two years.
उत्तर
Original cost = ₹ 50,000
Residual value = ₹ 10,000
Estimated life = 10 years
Amount of depreciation = `("Original cost" - "Scrap value")/"Estimates life"`
`= (50,000 - 10,000)/10`
`= (40,000)/10`
= ₹ 4,000
Rate of depreciation = `"Amount of depreciation"/"Original cost" xx 100`
`= (4,000)/(50,000) xx 100`
= 8%
Journal entry
| Date | Particulars | J.F. | Debit ₹ | Credit ₹ |
| 1.1.2016 | Machinery A/c Dr. To Bank A/c (Machinery bought) |
50,000 | 50,000 | |
| 31.12.2016 | Depreciation A/c Dr. To Machinery A/c (Depreciation provided) |
4,000 | 4,000 | |
| 31.12.2016 | Profit and loss A/c Dr. To Depreciation A/c (Depreciation transferred to profit and loss A/c) |
4,000 | 4,000 | |
| 31.12.2017 | Depreciation A/c Dr. To Machinery A/c (Depreciation provided) |
4,000 | 4,000 | |
| 31.12.2017 | Profit and loss A/c Dr. To Depreciation A/c (Depreciation transferred to profit and loss A/c) |
4,000 | 4,000 |
APPEARS IN
संबंधित प्रश्न
Write the word/term/phrase which can substitute the following statement:
The type of asset on which depreciation is charged.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount spent on installation of new machinery is a ______ expenditure.
Select the most appropriate answer from the alternatives given below and rewrite the sentence:
The amount of depreciation remains constant every year under ______
State the advantages of written down value method of depreciation.
Ragul purchased machinery on April 1, 2014 for ₹ 2,00,000. On 1st October 2015, a new machine costing ₹ 1,20,000 was purchased. On 30th September 2016, the machinery purchased on April 1, 2014 was sold for ₹ 1,20,000. Books of accounts are closed on 31st March and depreciation is to be provided at 10% p.a. on straight line method. Prepare machinery account and depreciation account for the years 2014-15 to 2016-17.
Furniture costing ₹ 5,000 was purchased on 1.1.2016, the installation charges being ₹ 1,000. The furniture is to be depreciated @ 10% p.a. on the diminishing balance method. Pass journal entries for the first two years.
If the cost of the Computer is ₹ 40,000 and depreciation is to be charged at 8% p.a. Calculate the amount of depreciation.
On 1st April 2015, Farid of Nasik purchased a Motor Car for ₹ 55,000. The scrap value of the Motor Car was estimated at ₹ 10,000 and its estimated life is 10 years. The Registration charge for the Motor Car was ₹ 5,000.
Show Motor Car Account for first four years, assuming that the books of accounts are closed on 31st March every year.
On 1st April 2015, Suman Traders purchased Machinery for ₹ 30,000. On 1st Oct. 2015, they purchased further Machinery costing ₹ 20,000.
On 1st Oct. 2016, they sold the Machine purchased on 1st April 2015 for ₹ 18,000 and brought another Machine for ₹ 15,000 on the same date.
Depreciation is provided on Machinery @ 20% p.a. on the Diminishing Balance Method and the financial year closes on 31st March every year.
Prepare the Machinery Account and Depreciation Account for the year 2015-16, 2016-17, and 2017-18.
M/s Omkar Enterprise Jalgaon acquired a Printing Machine for ₹ 75,000 on 1 Oct 2015 and spent ₹ 5,000 on its transport and installation. Another Machine for ₹ 45,000 was purchased on 1st Jan 2017. Depreciation is charged at the rate of 20% on Written Down Value Method, on 31st march every year.
Prepare Printing Machine Account for the first four years.
