Question

On 1st January, 2009, Nagaji Bros., purchased six machineries for Rs 15,000 each. Depreciation @10%p.a. on original cost of machines has been provided and accumulated in 'Depreciation Provision Account' on 31st December every year.

On 1st January, 2010 one machine was sold for Rs 12,500 and on 1st January, 2011, a second machine was also sold for Rs 13,000.An improved model with a cost oH 28,000 was purchased on 1st July, 2010 and the arrangement for providing depreciation was kept to be the same as for older machines. Show Machinery a/c, Provision for Depreciation a/c and Machinery Disposal a/c.

Or

Record the following transactions in the Cash Book of Ghasidas :

$\begin{array}{cccccc}2011& \text{Particulars}& \text{(Rs)}& 2011& \text{Particulars}& \text{(Rs)}\\ \text{Jan. 1}& \text{Business commenced}& & \text{Jan. 15}& \text{Paid to B}& 2,800\\ & \text{With cash}& 50,000& & \text{Discount received}& 200\\ \text{Jan. 2}& \text{Deposited into Bank}& \text{20,000}& \text{Jan. 18}& \text{Cash purchases}& 4,000\\ & \text{Cash purchases}& 5,000& \text{Jan. 20}& \text{Received from C in full}& \\ \text{Jan. 4}& \text{Wages paid}& 25& & \text{Settlement of Rs 1,000}& 950\\ \text{Jan. 6}& \text{Cash Sales}& 2,000& \text{Jan. 25}& \text{Donation given}& 10\\ & \text{Purchased goods for cash}& 10,000& \text{Jan. 26}& \text{Got Promissory Note from C}& 500\\ \text{Jan. 10}& \text{Sold goods for cash}& & \text{Jan. 27}& \text{Promissory note of C}& \\ & \text{by Cheque}& 4,000& & \text{deposited into Bank and}& \\ \text{Jan. 12}& \text{Purchased goods \& paid}& & & \text{withdrawn from Bank}& \\ & \text{By Cheque}& 3,000& & \text{for official use}& 500\\ & \text{Received from 'A'}& 590& & & \\ & \text{Discount allowed}& 10& & & \end{array}$

Answer 1

In the books of Nagaji Bros.

Machinery A/c

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Amount (Rs)}& \text{S.NO.}& \text{Particulars}& \text{Amount (Rs)}\\ 2009& & & 2009& & \\ \text{1 Jan.}& \text{To Bank A/c}(15,000\times 6)& 90,000& \text{31 Dec.}& \text{By balanced c/d}& 90,000\\ & & \underset{–}{\overline{\underset{–}{90,000}}}& & & \underset{–}{\overline{\underset{–}{90,000}}}\\ 2010& & & 2010& & \\ \text{1 Jan.}& \text{To Balance b/d}& 90,000& \text{1 Jan.}& \text{By Machinery Disposal A/c}& 15,000\\ \text{1 July}& \text{To Bank A/c}& 28,000& \text{31 Dec.}& \text{By Balance c/d}& 1,03,000\\ & & & & & \\ & & \underset{–}{\overline{\underset{–}{1,18,000}}}& & & \underset{–}{\overline{\underset{–}{1,18,000}}}\\ 2011& & & 2011& & \\ \text{1 Jan.}& \text{To Balance b/d}& 1,03,000& \text{1 Jan.}& \text{By Machinery Disposal A/c}& 15,000\\ & & & \text{31 Dec.}& \text{By Balance c/d}& 98,000\\ & & & & & \\ & & \underset{–}{\overline{\underset{–}{1,03,000}}}& & & \underset{–}{\overline{\underset{–}{1,03,000}}}\\ & & & & & \\ \text{2012}& & & & & \\ \text{1 Jan.}& \text{To Balance b/d}& \text{98,000}& & & \end{array}$

Provision for Dep. A/c

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Amount (Rs)}& \text{Date}& \text{Particulars}& \text{Amount (Rs)}\\ 2009& & & 2009& & \\ \text{31 Dec}& \text{To Balance c/d}& 90,000& \text{31 Dec.}& \text{By Depreciation A/c}& 9,000\\ & & & & (1,500\times 6)& \\ & & & & & \\ & & \underset{–}{\overline{\underset{–}{9,000}}}& & & \underset{–}{\overline{\underset{–}{9,000}}}\\ 2010& & & 2010& & \\ \text{1 Jan.}& \text{To Machinery Disposal A/c}& 1,500& \text{1 Jan.}& \text{By Balance b/d}& 9,000\\ \text{31 Dec.}& \text{To Balance c/d A/c}& 16,400& \text{31 Dec.}& \text{By Depreciation A/c}& 8,900\\ & & & & (1,500\times 5)+1,400& \\ & & & & & \\ & & \underset{–}{\overline{\underset{–}{17,900}}}& & & \underset{–}{\overline{\underset{–}{17,900}}}\\ 2011& & & 2011& & \\ \text{1 Jan.}& \text{To Machinery Disposal}& 3,000& \text{1 Jan.}& \text{By Balance b/d}& 16,400\\ \text{31 Dec.}& \text{To Balance c/d}& 22,200& \text{31 Dec.}& \text{By Depreciation A/c}& 8,800\\ & & \underset{–}{\overline{\underset{–}{\text{25,200}}}}& & (1500\times 4)+2800& \underset{–}{\overline{\underset{–}{\text{25,200}}}}\\ & & & \text{2012}& & \\ & & & \text{1 Jan.}& \text{By Balance b/d}& \end{array}$

Machinery Disposal A/c

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& \text{Amount (Rs)}& \text{Date}& \text{Particulars}& \text{Amount (Rs)}\\ 2010& & & 2010& & \\ \text{1 Jan}& \text{To Machinery}& 15,000& \text{1 Jan.}& \text{By Provision for Dep. A/c}& 1,500\\ & & & & \text{By Bank A/c (Sale)}& 12,500\\ & & & & \text{By P \& L A/c (Loss)}& 1,000\\ & & & & & \\ & & \underset{–}{\overline{\underset{–}{15,000}}}& & & \underset{–}{\overline{\underset{–}{15,000}}}\\ 2011& & & 2011& & \\ \text{1 Jan.}& \text{To Machinery Disposal A/c}& 15,000& \text{1 Jan.}& \text{By Prov. for Dep. A.c}& 3,000\\ & \text{To P \& L A/c (Profit)}& 1,000& & \text{By Bank A/c (Sale)}& 13,000\\ & & & & (1,500\times 5)+1,400& \\ & & \underset{–}{\overline{\underset{–}{16,000}}}& & & \underset{–}{\overline{\underset{–}{16,000}}}\end{array}$

In the Books of Chasidas Cash Book

$\begin{array}{cccccccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Cash (Rs)}& \text{Bank (Rs)}& \text{Date}& \text{Particulars}& \text{L.F.}& \text{Cash (Rs)}& \text{Bank (Rs)}\\ \text{2011}& & & & & \text{2010}& & & & \\ \text{Jan. 1}& \text{To Capital A/c}& \text{50,000}& & & & & & & \\ \text{Jan. 2}& \text{To Cash A/c (c)}& & & \text{20,000}& \text{Jan. 2}& \text{By Bank A/c (c)}& & \text{20,000}& \\ \text{Jan. 6}& \text{To Sales A/c}& \text{2,000}& & & \text{Jan. 2}& \text{By Purchases}& & \text{5,000}& \\ \text{Jan.10}& \text{To Sales A/c}& & & \text{4,000}& \text{Jan. 4}& \text{By Wages}& & \text{25}& \\ \text{Jan. 20}& \text{To C}& \text{950}& & & \text{Jan. 6}& \text{By Purchases}& & \text{10,000}& \\ \text{Jan. 27}& \text{To Bank A/c (c)}& \text{500}& & & \text{Jan. 12}& \text{By Purchases}& & \text{3,000}& \\ & & & & & \text{Jan. 15}& \text{By B}& & \text{2,800}& \\ & & & & & \text{Jan. 18}& \text{By Purchases A/c}& & \text{4,000}& \\ & & & & & \text{Jan. 25}& \text{By Donation}& & \text{10}& \\ & & & & & \text{Jan. 27}& \text{By Cash A/c (c)}& & \text{11,615}& \text{20,500}\\ & & & & & \text{Jan. 31}& \text{By Bal. c/d}& & \text{11,615}& \text{20,500}\\ & & & \overline{\underset{–}{\text{53,450}}}& \overline{\underset{–}{\text{24,000}}}& & & & \overline{\underset{–}{\text{53,450}}}& \overline{\underset{–}{\text{24,000}}}\\ \text{Feb. 1}& \text{To Bal. b/d}& & \text{11,615}& \text{20,500}& & & & & \end{array}$