AE for Depreciation

Q.

What will be the impact in accounting equation for recording depreciation of asset?

1. Assets - Increase
   Liabilities - No effect
   Capital - Decrease

2. Assets - Decrease
   Liabilities - Increase
   Capital - No effect

3. Assets - Decrease
   Liabilities - No effect
   Capital - Decrease

4. Assets - No effect
   Liabilities - Decrease
   Capital - Increase

Q. 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.

Q. 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.

Q.

What is the difference between the profit and loss account and the income and expenditure account?

Q. Following balances appear in the books of Priyank Brothers:

		₹
1st April, 2016	Machinery A/c	20, 00, 000
	Provision for Depreciation A/c	8, 00, 000

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.

Q.

Deluxe company purchased a furniture worth Rs 80, 000 on 1st April 2009 and Additional Furniture on 1st October 2009 worth Rs 60, 000.

They charged depreciation at 15% p.a. on Fixed Instalment basis

On 1st October 2011 they sold out furniture for Rs 60, 000 which was purchased on 1st April 2009. Prepare Furniture Account and Depreciation Account for the year 2009-10, 2010-11 and 2011-12 assuming that the financial year closes on 31st March every year.

Q.

Sahil Bros. Kolhapur, Purchased a Machinery on 1st April 2008 for Rs 47, 000 and spent Rs 3, 000 for its installation. On 1st October 2008 additional Machinery Costing Rs 5, 000 was Purchased. On 1st July 2009 the Machinery Purchased. on 1st October 2008 was sold for Rs 3, 000 and on the same date new Machinery was purchased for Rs 12, 000.
They decided to provide to depreciation @ 10% p.a. under Straight Line Method on 31st March every year
Prepare Machinery Account and Depreciation Account for 3 year only

Q. The value of assets is Rs.24, 000. Depreciation for the year comes down to Rs.4, 000. The updated value of the assets will be .

1. Rs. 24, 000
2. Rs. 20, 000
3. Rs.16, 000
4. Rs.28, 000

Q.

Prakash Trading Company Purchased a machine worth Rs 77, 600 and installed at a cost Rs 2, 400 on 1st October 2006. On 1st April 2007 an additional Machine costing Rs 40, 000 was purchased. The machine purchased on 1st April 2007 having become obsolete and was Sold for Rs 22, 000 on 1st October 2009, and a new machine worth Rs 60, 000 was purchased on 1st November 2009.
The depreciation was provided annually on 31st March @ 10% p.a. on original cost of machine.
show Machinery Account for the year 2006-07, 2007-08, 2008-09 and 2009-10

Q.

M/s Sagar Limited purchased a machinery for Rs 3, 00, 000 on 1st April 2008 additional machinery was acquired for Rs 3, 00, 000 on 30th September 2009 and for Rs 50, 000 on 1st April 2011.
Machinery which was purchased on 30th September 2009 was sold for Rs 2, 25, 000 on 30th September 2011
You are required to give Machinery Account Depreciation Account for the year ended 31st March 2009, 31st March 2010, 31st March 2011, and 31st March 2012, taking into account depreciation @ 10% p.a. on written down value method

Q.

Akshay purchased machinery worth Rs 20, 000 on 1st April 2006. He charges depreciation @ 10% on Written Down Value Method on 31st March every year.
On 1st July 2008 he sold a part of the Machinery for Rs 2, 000 The original cost of which on 1st April 2006 was Rs 4, 000
Prepare Machinery Account for first four years and pass Journal entries for 3rd year i.c. 2008-09

Q.

Q.

Q.

On 1st april , 2009 squash co. ltd bought a machinery for rs.75000 and spent for installation charges rs.10000 , import duty rs.10000 and for transportation rs.5000 . On 1st feb spent for repairing charges rs.1000 , the life of the machinery if 5 yrs . find depreciation and prepare machinery account

Q.

Atul Traders, Ratnagiri purchased machinery for Rs 1, 47, 000 on 1st April 2008 and spent Rs 3, 000 an its fixation and erection. In the same year on 1st october, additional machinery costing Rs 50, 000 was purchased. On 1st October 2010 the machinery purchased on 1st october 2008 was sold for Rs 35, 000.
Depreciation was provided annually on 31st March @ 10% p.a. on Reducing Balance Method. Prepare Machinery Account and Depreciation Account for 3 years