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Revision Assign - Depreciation

This document contains 10 questions related to preparing machinery accounts over multiple years using different depreciation methods like straight line and diminishing balance. The questions involve purchases and sales of various machines on different dates, additional expenses incurred, and calculation of depreciation expense and accumulated depreciation annually to arrive at the balance in the machinery account.

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Tribhuwan Joshi
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29 views2 pages

Revision Assign - Depreciation

This document contains 10 questions related to preparing machinery accounts over multiple years using different depreciation methods like straight line and diminishing balance. The questions involve purchases and sales of various machines on different dates, additional expenses incurred, and calculation of depreciation expense and accumulated depreciation annually to arrive at the balance in the machinery account.

Uploaded by

Tribhuwan Joshi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Revision Assignment

Ch- Depreciation

Q1 .On 1.1.2010 an asset was purchased for ₹ 35000. The estimated life of the asset is 5 years after
which its breakup value will be ₹ 5000 only. Prepare the asset account for the first three years, by
straight line method assuming that the books are closed on 31st December.

Q 2 Good Manufacturer Ltd. acquired a machine on 1st July 2011, at a cost of ₹ 25000 and spent
₹1000 on its installation. The firm writes off depreciation at 10% of the original cost every year. Show
the machinery account for three years. The books are closed on 31st December.

Q 3 A firm purchased machinery at a cost of ₹ 46000 on 1st October, 2011 and incurred ₹4000 as
expenses on its purchase and installation. The rate of depreciation under straight line method is 10% p.a.
The firm closes its books on 31st December, each year. On 1st July, 2012, another machine worth ₹
20000 was purchased. Prepare Machinery account for 2011, 2012 and 2013.

Q 4 A limited company purchased on 1st January 2010 a small plant for ₹10000. On 1st July, in the same
year additional plant was purchased costing ₹5000. On 1st July, 2011, the plant purchased on 1st
January 2010 having become obsolete is sold off for ₹4000. On 1st July 2012, a fresh plant was
purchased for ₹12000 and the plant purchased on 1st July, 2011 was sold for ₹4200. Depreciation is
provided at 10% p.a. on SLM every year. Show Machinery Account for 3 years.

Q5 On 1.4.2011, XYZ Ltd. purchased a second hand machine for ₹ 80000 and spent ₹ 20000 on its
cartage, repairs and installation. The residual value at the end of its expected useful life of 4 years is
estimated at ₹40000. On 30th Sept. 2012, repairs and renewals amounted to ₹2000. On 30th Sept. 2013,
this machine is sold for ₹50000. Depreciation is to be provided according to straight line method.
Prepare Machinery account for first three years assuming that the accounts are closed on 31st March
each year.

Q6 X Ltd. purchased second hand machinery on 1.1. 2010 for ₹40000. On 1st July 2002, it purchased
another machine for ₹10000 and on July 1, 2012 sold off the first machine purchased in 2001 for ₹28000;
on the same date it purchased a machinery for ₹25000.on 1st July 2013, the second machinery
purchased for ₹10000 was also sold off for ₹2000. Depreciation was provided on the Machinery at a
rate of 10% on the original cost annually on 31st December. Prepare Machinery account commencing
from January 1st, 2010.

Q7 On 1st January 2011, X Ltd. purchased a machinery for ₹ 60000. On 1st July, 2011 an additional
machinery costing ₹ 20000 was purchased. On 1st July, 2003, the machine purchased on 1.1.2011 was
sold for ₹28600 and on the same date, a new machine was purchased at a cost of ₹40000. Show the
Machinery account for the first four years according to Diminishing Balance

Q8)A firm purchased on 1st April, 2020 a second-hand machinery for Rs.36,000 and spent Rs.4,000 on its
installation.On 1st July in the same year, another machinery costing Rs.20,000 was purchased.On 1st
July, 2022 machinery brought on 1st April, 2020 was sold for Rs.12,000 and a new machine purchased
for Rs.64,000 on the same date. Depreciation is provided annually on 31st March @ 10% per annum on
the written down value method. Show the machinery account from 2020-21 to 2022-23.
Q9) From the following transactions of a concern, prepare the Machinery Account for the year ended
31st March, 2023:
1st April, 2022 : Purchased a second-hand machinery for ₹ 40,000
1st April, 2022 : Spent ₹ 10,000 on repairs for making it serviceable.
30th September, 2022 : Purchased additional new machinery for ₹ 20,000.
31st December, 2022 : Repairs and renewals of machinery ₹ 3,000.

Depreciate machinery at 10%.

Q10)Dream Traders purchased a second-hand machinery on 1st April, 2020 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, 2021 to
2023 and show Profit or Loss as it was sold on 31st March, 2023 for ₹10,800.

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