Question

On 1st April 2009 Mahindra & Company Sangli purchased two Computers for Rs 37,000. The fixation charges were amounted to Rs 3,000. They decided to provide depreciation on Computers @ 15% p.a. under Fixed Instalment Method.

On 1st October 2011 one Computer having original cost of Rs 20,000 was sold for Rs 15,000 and on the same date new Computer was purchased for Rs 30,000.

Depreciation was provided annually on 31st March.

Show Computer Account for 2009-10, 2010-11, 2011-12.

Answer 1

Computer Account
Dr.								Cr.
Date		Particulars	Amount (Rs)	Date	Particulars		Amount (Rs)
2009				2010
Apr 1		Bank A/c(C1) (37,000 + 3,000)	40,000	Mar 31	Depreciation A/c		6,000
				Mar 31	Balance c/d (40,000 – 6,000)		34,000
			40,000				40,000
2010				2011
Apr 1		Balance c/d	34,000	Mar 31	Depreciation A/c		6,000
				Mar 31	Balance c/d (34,000 – 6,000)		28,000
			34,000				34,000
2011				2011
Apr 1		Balance c/d	28,000	Oct 1	Depreciation A/c		1,500
Oct 1		Profit & Loss A/c	2,500	Oct 1	Bank A/c		15,000
Oct 1		Bank A/c (C2)	30,000	2012
				Mar 31	Depreciation
					C1	3,000*
					C2 (for 6 months)	2,250	5,250
				Mar 31	Balance c/d
					C1 (14,000 – 3,000)	11,000
					C2 (30,000 – 2,250)	27,750	38,750
			60,500				60,500

Working Notes: Calculation of Profit or Loss on Sale

Particulars	Amount
Value of Computer as on Apr. 01, 2009	20,000
Less: Depreciation @15%	(3,000)
Value of Computer as on Apr. 01, 2010	17,000
Less: Depreciation @15%	(3,000)
Value of Computer as on Apr. 01, 2011	14,000
Less: Depreciation for 6 months	(1,500)
Value of Computer as on Oct. 01, 2011	12,500
Less: Sale Value	(15,000)
Profit on Sale	(2,500)