Class 11 Accountancy Chapter 11 - Depreciation

TS Grewal Solutions for Class 11 Accountancy Chapter 11

TS Grewal Solutions for Class 11 Accountancy Chapter 11 – Depreciation is a concept that students should consider while preparing for their Accountancy exam. Here, are few solutions rendered in a simple and stepwise method.

Class 11 TS Grewal Solutions Accountancy Chapter 11:-Download PDF Here

Board CBSE
Class Class 11
Subject Accountancy
Chapter Chapter 11
Chapter Name Depreciation
Number of questions solved 7
Category TS Grewal

Chapter 11 – Depreciation defines the below-mentioned concepts:

  • Straight Line Method
  • Double-Declining Balance Method
  • Modified Accelerated Cost Recovery System Depreciation Method
  • Unit of production method

TS Grewal Solutions for Class 11 Accountancy Chapter 11 – Depreciation

QUESTION 1

Under Straight Line Method calculate the rate of depreciation for the following.

Bought a second- hand machine for ₹96,000 spent 24,000 on its installation, cartage, and repair, estimated useful life of machinery 4years. Estimated residual value ₹72,000.

Solution.

Amount of Depreciation = Cost of a machine – Scrape value of Machine
Life in Years
= 1,20,000 – 7,200 = ₹ 12,000
4
Rate of Depreciation = Amount of Depreciation X 100
Cost of Machine
= 12,000 X 100= 10%pa.
1,20,000

Question 2

Company A bought a machine for ₹4,00,000 and spent ₹50,000 on its installation on 1st April 2015. Total of 10 years is the estimated life of the machinery, after which its reselling value will be ₹50,000 only. According to the Fixed installment method and prepare machine account for the first three years find out the amount of annual depreciation. Every year the books are closed on 31st March.

Solution.

In the book of company A

Machinery Account

Date Particulars J.F Date Particulars J.F
2015

April 01

April 01

To Bank A/c

To Bank A/c (Erection Expense)

4,00,000

50,000

2016

March 31

Bt Depriciation A/c

By Balance c/d

40,000

4,10,000

4,50,000 4,50,000
2016

April 01

To Balance b/d 4,10,000 2017

March 31

Bt Depriciation A/c

By Balance c/d

40,000

3,70,000

4,10,000 4,10,000
2017

April 01

To Balance b/d 3,70,000 2018

March 31

Bt Depriciation A/c

By Balance c/d

40,000

3,30,000

3,70,000 3,70,000

Calculation of Depreciation.

Depreciation p.a. = 4,00,000+50,000-50,000(scrap value)
10 years

= ₹ 40,000 p.a

Question 3

Prepare a machinery account for the year end 31st March 2018 from the below-mentioned transaction.

1st April 2017- Bought second-hand machinery for 40,000

1st April 2017- Spent ₹10,000 on repairs for making it serviceable

30th September 2017- Bought additional new machinery ₹ 20,000

31st December 2017 – Renewals and repair of machinery ₹3,000

31st March 2018- DEpreciate the machinery @ 10%

Solution.

Machinery Account
Date Particulars J.F Date Particulars J.F
2017

April 1

To Bank A/c

Machinery 1

50,000 2018

March 31

By Depreciation A/c

Machinery 1 5,000

Machinery 2 1,000

6,000
Sept 30 To Bank A/c

Machinery 2

20,000 March 31 By Balance c/d

Machinery 1 45,000

Machinery 2 19,000

64,000
70,000 70,000

Question 4

On 1st April Raul & brothers sold a machine for ₹5,00,000. They purchased the machine 1st April 2013 at the cost of ₹7,50,000. Arrange the machinery account and provision for Depreciation account as on 31st March 2017. Assume that the company was charging depreciation @ 10% on a straight line method.

Mentioned below are the balances of Raul & Brothers.

2016

1st April

Machinery A/c

Provision for Depreciation A/c

20,00,000

8,00,000

Solution.

In the book of Raul & Brothers
Date Particulars J.F Date Particulars J.F
2016

April 01

To Balance

b/d

20,00,000 2016

April 01

April 01

April 01

2017

March 31

By provision for Depreciation A/c

By Bank A/c

By profit & loss A/c(Loss)

By Balance c/d

2,25,000

5,00,000

25,000

12,50,000

20,00,000 20,00,000
Provision for Depreciation A/c
Date Particulars J.F Date Particulars J.F
2016

April 01

To Machinery A/c 2,25,000 2016

April 01

By Balance b/d 8,00,000
2017

March 31

To Balance c/d 7,00,000 2017

March 31

By Depreciation A/c 1,25,000
9,25,000 9,25,000

Working Note:

Profit & Loss calculation on a sale of machinery.

Particulars
The original cost of Machinery

Less: Accumulate Depreciation machinery sold for 3 years till March

(7,50,000 x 3 x 10%)

7,50,000

(2,25,000)

Book Value of Machinery sold

Less: Sale value

5,25,000

(5,00,000)

Loss on Sale 25,000

Question 5

A printing machine was purchased from abroad for ₹10,000, forwarding and shipping charges ₹2,000, installation expense ₹1,000, import duty ₹7,000. Calculate depreciation for the first three years (separately) at the diminishing balance method of 10%.

Solution:

Printing Machine Account
Date Particulars J.F Date Particulars J.F
1st Year

Jan 01

To Bank A/c 20,000 1st Year

Dec 31

Dec 31

By Depreciation A/c

By Balance c/d

2,000

18,000

20,000 20,000
2nd Year

Jan 01

To Balance b/d 18,000 2ndYear

Dec 31

Dec 31

By Depreciation A/c

By Balance c/d

1,800

16,200

18,000 18,000
3rd Year

Jan 01

To Balance b/d 16,200 3rd Year

Dec 31

Dec 31

By Depreciation A/c

By Balance c/d

1,620

14,580

16,200 16,200

Goods cost= 10,000+2,000+7,000+1,000= ₹20,000

Question 6

Babita bought a machine for ₹6,000 on 1st April 2016. She also bought another machine for ₹5,000. He purchased the machine bought on 1st April for ₹4,000 on 1st October 2017. Under the diminishing balance method, the depreciation was decided @ 10% p.a. Show the machinery account for the year 2017 and 2018 assuming the accounts were closed on the year end 31st March.

Solution.

Printing Machine Account
Date Particulars J.F Date Particulars J.F
2016

April 01

Oct 01

To Bank A/c Machinery 1

To Bank A/c Machinery 2

6,000

5,000

2017

Mar 31

By Depreciation A/c

Machinery 1 600

Machiner 2 (6months) 250

By Balance c/d

Machinery 1

Machinery 2

850

5,400

4,750

11,000 11,000
2017

April

01

To Balance b/d

Machinery 1

Machinery 2

5,400

4,750

2017

Oct 01

Oct 01

Oct 01

By Depreciation A/c

Machiner 1 (6months)

By Bank A/c

By Profit & Loss A/c

270

4,000

1,130

2018

March 31

March 31

By Depreciation A/c

Machinery 2

By Balance c/d Machinery 2

475

4,275

10,150 10,150

Working Note.

Profit & Loss calculation on a sale of machinery.

Particulars
Book value of Machinery 1st April 2017

Less: Depreciation A/c (6months)

5,400

(270)

Book Value of Machinery 1st Oct 2017

Less: Sale

5,130

(4,000)

Loss on sale on Machinery 1,130

Question 7

Komal traders bought second-hand machinery for ₹23,000 on 1st April 2015 and spent ₹2,000 on repairs. Om diminishing balance method, it was decided to depreciate the machinery @ 20% on 31st March every year.

Prepare machinery account from every year on 31st March from the year 2016 to 2018. Show the profit & loss as the machine was sold for ₹10,800 on 31st March 3018.

Solution.

Printing Machine Account
Date Particulars J.F Date Particulars J.F
2015

Apr 01

To Bank A/c (23,000+2,000) 25,000 2016

Mar 31

Mar 31

By Depreciation A/c (25,000×20%)

By Balance c/d

5,000

20,000

25,000 25,000
2016

Apr 01

To Balance b/d 20,000 2017

Mar 31

Mar 31

By Depreciation A/c (20,000×20%)

By Balance c/d

4,000

16,000

20,000 20,000
2017

Apr 01

To Balance b/d 16,000 2018

Mar 31

Mar 31

Mar 31

By Depreciation A/c (16,000×20%)

By Balance c/d

By Profit & Loss A/c

3,200

10,800

2,000

16,000 16,000