Question

A Van was purchased on 1st April, 2016 for ₹ 60,000 and ₹ 5,000 was spent on its repair and registration. On 1st October, 2017 another van was purchased for ₹ 70,000. On 1st April, 2018, the first van purchased on 1st April, 2016 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Van Account from 2016-17 to 2018-19 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

Answer 1

Van Account
Dr.												Cr.
Date		Particulars		J.F.	Amount (₹)	Date	Particulars			J.F.	Amount (₹)
2016						2017
April 01		Bank (I)			65,000	March 31	Depreciation (I)				6,500
						March 31	Balance c/d (I)				58,500
					65,000						65,000
2017						2018
April 01		Balance b/d (I)			58,500	March 31	Depreciation
Oct. 01		Bank (II)			70,000		(I)	6,500
							(II) (for 6 month)	3,500			10,000
						March 31	Balance c/d
							(I)		52,000
							(II)		66,500		1,18,500
					1,28,500						1,28,500
2018						2019
April 01		Balance b/d				April 01	Bank (I)				45,000
		(I)	52,000			April 01	Profit and Loss (Loss on Sale)				7,000
						2018
		(II)	66,500		1,18,500	March 31	Depreciation
April 01		Bank (III)			1,70,000		(II)		7,000
							(III)		17,000		24,000
						March 31	Balance c/d
							(II)		59,500
							(III)		1,53,000		2,12,500
					2,88,500						2,88,500

Working Notes

1. Calculation of Annual Depreciation

2. Calculation of profit or loss on sale of Van (I)

Particulars	Amount (₹)
Book Value on Apr. 01, 2018	52,000
Less: Sale of Van	(45,000)
Loss on Sale of Van	7,000