Question

TU Limited purchased a crane for Rs. 11,75,000 and spend Rs. 50,000 for its registration on 1st January, 2013. Depreciation is charged @ 10 % per annum, WDV method. The crane is sold for Rs. 7,00,000 on 31st March, 2016. Assuming that TU Limited follows the financial year, prepare crane account for the relevant period.

Answer 1

$\begin{array}{cccccccc}\text{Dr}& & & & \text{Crane Account}& & & \text{Cr}\end{array}$

$\begin{array}{ccccccccc}\text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs)}& \text{Date}& \text{Particulars}& \text{JF}& \text{Amt. (Rs)}& \\ \text{2013}& & & & \text{2014}& & & & \\ \text{Jan 1}& \text{Bank A/c}& & 12,25,000& \text{Mar 31}& \text{Depreciation A/c}& & 30,625& \\ & (11,75,000+50,000)& & & & \text{Balance c/d}& & 11,94,375& \\ & & & \overline{\underset{–}{\underset{–}{12,25,000}}}& & & & \overline{\underset{–}{\underset{–}{12,25,000}}}& \\ \text{2014}& & & & \text{2015}& & & & \\ \text{Apr 1}& \text{Balance b/d}& & 11,94,375& \text{Mar 31}& \text{Depreciation A/c}& & 1,19,437.5& \\ & & & & & \text{Balance c/d}& & 10,74,937.5& \\ & & & \overline{\underset{–}{\underset{–}{11,94,375}}}& & & & \overline{\underset{–}{\underset{–}{11,94,375}}}& \\ \text{2015}& & & & \text{2016}& & & & \\ \text{Apr 1}& \text{Balance b/d}& & 10,74,937.5& \text{Mar 31}& \text{Depreciation A/c}& & 1,07,493.75& \\ & & & & & \text{Bank A/c}& & 7,00,000& \\ & & & & & \text{Profit \& Loss A/c}& & \text{2,67,443.75}& \\ & & & & & \text{(Loss on sale)}& & & \\ & & & \overline{\underset{–}{\underset{–}{10,74,937.5}}}& & & & \overline{\underset{–}{\underset{–}{10,74,937.5}}}& \end{array}$

Working Note :

Depreciation for the year 2014-15
= 12,25,000 $\times \frac{10}{100}\times \frac{3}{12}=Rs.30,625$