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Depreciation Assignment

This document contains 14 practice questions regarding depreciation accounting for machinery. Each question provides additional details on machinery purchases and sales over multiple years, and asks the student to prepare the relevant machinery and accumulated depreciation accounts based on the information given using different depreciation methods.

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jainmoulding.jainjain
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134 views

Depreciation Assignment

This document contains 14 practice questions regarding depreciation accounting for machinery. Each question provides additional details on machinery purchases and sales over multiple years, and asks the student to prepare the relevant machinery and accumulated depreciation accounts based on the information given using different depreciation methods.

Uploaded by

jainmoulding.jainjain
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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PRACTICE SHEET - DEPRECIATION ACCOUNTING

Q1 B & Company purchased Machinery on 1st April, 2009, for Rs 54,000


and spent Rs 6,000 on its installation. On 1st December, 2010, it purchased
another machine for Rs 30,000. On 30th June 2011, the first machine
purchased on 1st April, 2009, is sold for Rs 36,000 and on the same date it
purchased a new machinery for Rs 80,000.
On December 1, 2012, the second machine (purchased on December 1, 2010)
was also sold off Rs 26,000. Depreciation was provided on machinery @ 10% p.a.
on Original Cost Method annually on 31st March. Give the machinery account for
four years.
Q2 X Ltd. which closes its books of account every year on 31 st March,
purchased on 1st October, 2011 machinery costing Rs 4,40,000. It purchased
further machinery on 1st April , 2012 costing Rs 5,20,000. On 30th Sept,
2013, the first machine was sold for Rs 3,00,000. On 1st July 2014, the
second machine purchased on 1st April, 2012 costing Rs 5,20,000 was sold for
Rs 2,50,000 and on the same date a fresh machine was installed at a cost of
Rs 3,00,000. The company writes off depreciation at 12% p.a. on the Reducing
Balance Method each year. Show the Machinery A/c for all the four years.

Q3 On 1st April, 2009, X Ltd. purchased 5 machines for Rs 60,000 each. The
accounting year of the Company ends on 31st December. Depreciation at the
rate of 10% p.a. on initial cost is charged to “Profit & Loss Account” and
Credited to a “Machinery account”. On 1st April 2011, one machine was sold
for Rs 40,000 and on 1st July , 2012 a second machine was sold for Rs 28,000.
Another machine with a higher capacity Rs 1,00,000 was purchased on 1 st
Oct. 2012. You are required to prepare Machinery Account.
Q4 On April 1, 2012, Z Ltd. purchase a plant for Rs 5,00,000. On 1st October in
the same year, additional plant costing Rs 2,00,000 was purchased. On 1 st
October 2013, the plant purchased on 1st April 2012, having become obsolete
was sold off for Rs 2,65,000. On 1st July 2014, new plant was purchased for
Rs 8,00,000 and on the same date plant purchased on 1st October 2012 was
sold for Rs 1,70,000. The firm provides depreciation @ 12% p.a. on Diminishing
balance Method on 31st December every year.
Q5 On 1st July, 2010, X Ltd. purchased a machinery for Rs 15,00,000.
Depreciation is provided @20% p.a. on the original cost of the machinery and
books are closed on 31st March year. On 31st May, 2012, a part of this
machine purchased on 1st July 2010 for Rs 3,60,000 was sold for Rs 2,40,000
and on the same date new machinery was purchased for Rs 4,20,000. You are
required to prepare Machinery Account

EDUCOMMERCE ACADEMY 1 7 0 F i r s t F l o o r , POCKET 25, SECTOR 24, ROHINI


9891580252
Q6 On October 01, 2010 Juneja Transport Company purchased 2 Trucks for Rs.
10,00,000 each. On July 01, 2013, One Truck was involved in an accident and was
completely destroyed and Rs. 6,00,000 were received from the insurance company in full
settlement. On December 31, 2013 another truck was involved in an accident and
destroyed partially, which was not insured. It was sold off for Rs. 1,50,000. On January 31,
2004 company purchased a fresh truck for Rs. 12,00,000. Depreciation is to be provided at
10% p.a. on the written down value every year. The books are closed every year on March
31. Give the truck account from 2010-11 to 2013-14.
Q7 Anu Ltd. purchased a Machinery worth Rs.76,500 on 1st January, 2001. Additional
machines were purchased on 1st July, 2002 worth Rs.55,000 and on 1st October, 2002 for
Rs.25,500. On 1st January, 2003 part of machine (purchased on 1st January, 2001
became useless and was sold for Rs.15,500 (Original cost Rs. 30,000). Depreciation is
charged @ 20% per annum by Fixed Installment Method.
Show the Machinery Account for first 3 years, assuming that the accounts were closed on
31st December every year.
Q8 M/s. ABC & Co. has a debit balance of Rs. 50,000 (original cost Rs. 1,20,000) in
computers account on April 01, 2000. On July 01, 2000 it purchased another computer
costing Rs. 2,50,000. One more computer was purchased on January 01, 2001 for Rs.
30,000. On July 01, 2002 the computer which was carried forward on 1st April 2000
became obselete and was sold for Rs. 10,000. A new version of the computer was
purchased on August 01, 2004 for Rs. 80,000. Show Computers account in the books of
M/s. ABC & Co. for the years ended on March 31, 2001, 2002, 2003 ,2004 and 2005. The
computer is depreciated @10 p.a. on straight line method basis
Q9 On 1st April, 2009, X Ltd. purchased a Plant and Machinery for Rs
43,000. It was estimated that the effective life of the Plant and Machinery will
be 10 years and after 10 years its scrap value will be Rs 3,000.
On 1st April, 2010, the Company purchased additional machine for Rs 25,000,
of which the effective life will be 15 years and scrap value Rs 2,500.
On 1st October, 2011, a new machine was purchased for Rs 12,000, of which
he scrap value will be Rs 2,000 and effective life 20 years.
Show the Plant and Machinery A/c upto 31 st March 2013, if depreciation is
provided on Straight Line Method. The accounts are closed on 31st March every
year.
Q10 You are given the following balances as on April 1,2005:
Machinery A/c Rs 5,00,000
Provision for Depreciation A/c Rs 1,16,000
Depreciation is charged on machinery at 20% p.a. by straight line basis method. a
piece of machinery purchased on April 1, 2003 for Rs 1,00,000 was sold on
October 1, 2005 for Rs 60,000. Prepare the Machinery Account and Provision
for Depreciation Account for the year ended 31st March 2006. Also prepare
Machinery Disposal Account.

EDUCOMMERCE ACADEMY 1 7 0 F i r s t F l o o r , POCKET 25, SECTOR 24, ROHINI


9891580252
Q11 The following balances appear in the book of Gopi Chand & Sons:
Machinery A/c as on 1-1-2014 Rs 8,00,000
Provision for Depreciation as on 1-1-2014 Rs 3,18,000

On 1-1-2014 they decided to sell a machine for Rs 34,500. This machine was
purchased for Rs 1,20,000 on 1-1-2010.
Show the Machinery A/c and Provision for Depreciation A/c for the year 2014
assuming the firm has been charging depreciation at 10% p.a. on the Original
Cost method and accounts are closed on 31st December every year.
Q12 Books of Chemicals Ltd. showed the following balances on 1st April, 2012 :
Machinery A/c Rs 10,00,000
Provision for Depreciation A/c Rs 4,05,000
On 1st April, 2012,a machine which had a cost Rs 2,00,000 on 1 st October, 2009
was sold for Rs 80,000. The firm writes off depreciation @10% p.a. under the
Original Cost 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.

Q13 The following balances appear in the books of Mr Z, on Jan 01, 2010
Rs.
Machinery account 15,00,000
Provision for depreciation account 5,50,000
On April 01, 2010 a machinery which was purchased on January 01, 2008 for Rs. 2,00,000
was sold for Rs. 75,000. A new machine was purchased on July 01, 2010 for Rs. 6,00,000.
Depreciation is provided on machinery at 20% p.a. on Straight line method and books are
closed on December 31 every year.
Prepare the machinery account and provision for depreciation account for the year ending
December 31, 2010 & 2011

Q14 Chaman Ltd. which depreciates its machines @ 10% p.a. on the Fixed
Installment Method, provides you the following informations :

Machinery A/c as on 1-4-2011 Rs 5,00,000


Provision for Depreciation A/c as on 1-4-2011 Rs 1,35,000
No depreciation is charged in the year of sale of machinery but full charge is
being made for the years during which the machinery is purchased.
On 1-10-2012, one new machinery was purchased for Rs 80,000 and old
machinery purchased on 1-10-2009 for Rs 60,000 was discarded but could not
be sold immediately. However, it was expected to realize Rs 10,000. Prepare (i)
Machinery Account, (ii) Provision for Depreciation Account, and (iii) Machinery
Disposal Account for the relevant years. Books are closing on 31st March every
year.

EDUCOMMERCE ACADEMY 1 7 0 F i r s t F l o o r , POCKET 25, SECTOR 24, ROHINI


9891580252

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