Company XYZ did some extraordinary repairs of Rs 50,000 (e.g., changed engines) on its delivery trucks. These repairs extended the useful life of the trucks. The company recorded the same in its repair account. The correct rectifying entry for the same would be :

Trucks account shall be debited

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Repairs account shall be credited

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A & B Both

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Solution

The correct option is C
A & B Both

Company XYZ did some extraordinary repairs of Rs 50,000 (e.g., changed engines) on its delivery trucks. These repairs extended the useful life of the trucks, Hence it should have been debited to truck account & to rectify the same repairs account has to be credited.

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The Fine Repairing Company provides repairing services amounting to Rs 25,000 to Monster Company on March 25, 2018. The Monster Company promises to pay the service fee on June 15, 2018. No service revenue has been recorded by the Fine Repairing Company until the end of its accounting period i.e March 31, 2018. What shall be the adjusting entry as at 31st March 2018?

Q. Question: Carriage Transport Company purchased 5 trucks at the cost of Rs

2, 00, 000

each on April 1, 2001. The company writes off depreciation @

20 %

per annum on original cost and closes its books on December 31st, every year. On October 1, 2003, one of the trucks is involved in an accident and is completely destroyed. The insurance company has agreed to pay Rs

70, 000

in full settlement of the claim. On the same date, the company purchased a second-hand truck for Rs

1, 00, 000

and spent Rs

20, 000

on its overhauling. Prepare Truck account and Provision for depreciation account for the three years ended on December 31, 2003. Also, give Truck account if truck disposal account is prepared.

Carriage Transport Company purchased 5 trucks at the cost of Rs 2,00,000 each on April 1, 2001. The company writes off depreciation @ $20 %$ per annum on original cost and closes its books on December 31st, every year. On October 1, 2003, one of the trucks is involved in an accident and is completely destroyed. The insurance company has agreed to pay Rs 70,000 in full settlement of the claim. On the same date, the company purchased a second-hand truck for Rs 1,00,000 and spent Rs 20,000 on its overhauling. Prepare Truck account and Provision for depreciation account for the three years ended on December 31, 2003. Also, give Truck account if truck disposal account is prepared.

Rectify the following errors:

(a)	Furniture purchased for Rs 10,000 wrongly debited to purchases account.
(b)	Machinery purchased on credit from Raman for Rs 20,000 was recorded through purchases book.
(c)	Repairs on machinery Rs 1,400 debited to machinery account.
(d)	Repairs on overhauling of secondhand machinery purchased Rs 2,000 was debited to Repairs account.
(e)	Sale of old machinery at book value of Rs 3,000 was credited to sales account.

If a repairs expenditure has been carried on a machine & it has been debited to Machinery account, which account shall be debited to rectify the same?

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