TEST SERIES FOR THE MONTH OF DECEMBER-2020

Time:90 Minutes MaxMarks:25

1. In which method of calculating deprecation, the cost of asset is not spread over in equal proportion 1
during its useful economic life?
2. When depreciation is charged, asset account is debited and depreciation account is credited. State true 1
or false.
3. Distinguish between Amortization and Obsolescence. 1
4. What will be the journal entry for transferring the asset to asset disposal account? 1
5. Original Cost = Rs.2,00,000; Scrap value = Rs.25,000. Depreciation for 2nd year @10% p.a. under 1
Written Down Value method?
6. M/s Krishna enterprise purchased a machine for Rs.6,00,000 on 1st October, 2010. On 1st July, 2011, it 6
had purchased another machine for Rs.4,80,000. On 1st January, 2013, the machine which was
purchased on 1st October, 2010 was sold for Rs.2,85,000 and on the same date, it had purchased
another machine for Rs.3,60,000. The company had charged depreciation @10% p.a. on Straight Line
Method. Show Machine Account from the year 2010-11 to 2012-13, assuming that the accounts are
closed on 31st March every year.
7. On 1st January, 2011 Star & Co. purchased two machines of Rs.40,000 each. On 1 st April, 2012 and 1st 6
July, 2012 it purchased additional machines for Rs.30,000 and for Rs.20,000 respectively. On 1 st
July,2013, one of the machines, purchased on 1st January, 2011 became obsolete and was sold for
Rs.21,000. Depreciation is written off @ 15% p.a. on written down value method on 31 st December
every year. You are required to prepare Machinery Account for first 3 years.
8. On 1st April, 2018, following balances appeared in the books on M/s Angel & Co. 8
Plant and Machinery A/c Rs.52,000
Provision for Depreciation A/c Rs.19,500
On 1.10.2018 a part of Machinery purchased for Rs.6,000 on 1.4.2016 was sold for Rs.2,900. On the
same date, a new Machinery costing Rs.21,000 was purchased. The depreciation was provided @
10%p.a. on original cost of the asset. Prepare Plant and Machinery A/c, Machinery Disposal A/c and
Provision for Depreciation A/c for the year ending 31.3.2020.