CHAPTER

14
Accounting for Depreciation

CW 1___________
Here,
Depreciation = = = = 27,000 per annum.

a) JOURNAL ENTRIES
Date Particulars L/F Dr. Amount Cr. Amount
1/1/2059 Plant A/c Dr 1,50,000
To Bank A/c 1,50,000
(Being purchased plant)
31/12/059 Depreciation A/c Dr 27,000
To Plant A/c 27,000
(Being depreciation charged)
31/12/059 P/L A/c Dr 27,000
To Depreciation A/c 27,000
(Being Depreciation transferred to P/L A/c)
31/12/060 Depreciation A/c Dr 27,000
To Plant A/c 27,000
(Being depreciation charged)
31/12/060 P/L A/c Dr 27,000
To Depreciation A/c 27,000
(Being Depreciation transferred to P/L A/c)
31/12/061 Depreciation A/c Dr 27,000
To Plant A/c 27,000
(Being depreciation charged)
31/12/061 P/L A/c Dr 27,000
To Depreciation A/c 27,000
(Being Depreciation transferred to P/L A/c)
Total 3,12,000 3,12,000

b)
Dr. PLANT ACCOUNT Cr.
Date Particulars JF Amount Date Particulars JF Amount
1/1/059 To bank 1,50,000 31/12/059 By Depreciation 27,000
31/12/059 By Balance c/d 1,23,000
1,50,000 1,50,000

Principles of Accounting – I 118

 1/1/060 To Balance b/d 1,23,000 31/12/060 By Depreciation 27,000
31/12/060 By Balance c/d 96,000
1,23,000 1,23,000
1/1/061 To Balance b/d 96,000 31/12/061 By Depreciation 27,000
31/12/061 By Balance c/d 69,000
96,000 96,000
1/1/062 To Balance b/d 69,000

CW 2___________
Here,
Cost of machine = 70,000
Freight of charge = 2,000
Installation Charge = 6,000
Salvage value = 12,000
Estimated life =5
Total cost of machine = Cost of machine + Freight + Installation = 70,000 + 2,000 + 6,000 = 78,000
Annual Depreciation = = = = Rs. 13,200 per annum

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/2001 To bank 78,000 30/6/2002 By Depreciation 13,200
30/6/2002 By Balance c/d 64,800
78,000 78,000
1/7/2002 To Balance b/d 64,800 30/6/2003 By Depreciation 13,200
30/6/2003 By Balance c/d 51,600
64,800 64,800
1/7/2003 To Balance b/d 51,600 30/6/2004 By Depreciation 13,200
30/6/2004 By Balance c/d 38,400
51,600 51,600
1/7/2004 To Balance b/d 38,400

CW 3_______________
Year 1st Machine 2nd Machine 3rd Machine Total
40,000
2000 2,000 2,000
38,000 45,000 83,000
2001 4,000 4,400 8,400
34,000 40,600 12,600 87,200
2002 4,000 4,400 600 9,000
30,000 36,200 12,000 78,200

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/2000 To bank 40,000 31/12/2000 By Depreciation 2,000
31/12/2000 By Balance c/d 38,000
40,000 40,000
1/1/2001 To Balance b/d 38,000 31/12/2001 By Depreciation 8,400
1/1/2001 To bank 45,000 31/12/2001 By Balance c/d 74,600
83,000 83,000
1/1/2002 To Balance b/d 74,600 31/12/2002 By Depreciation 9,000
1/7/2002 To bank 12,600 31/12/2002 By Balance c/d 78,200
87,200 87,200
1/1/2003 To Balance b/d 78,200

119 Accounting for Depreciation

CW 4___________
Here ,
Depreciation for 1st X-ray machine = = = 1,26,000
Year 1st Machine 2nd Machine Total
7,00,000
2060 31,500 31,500
6,68,500
2061 1,26,000 1,26,000
5,42,500 9,00,000
2062 35,500 1,35,000 1,66,500
5,11,000 7,65,000

DR. X- RAY MACHINERY ACCOUNT CR.

Date Particulars JF Amount Date Particulars JF Amount
1/10/2060 To Bank 7,00,000 30/12/2060 By Depreciation 31,500
30/12/2060 By Balance c/d 6,68,500
7,00,000 7,00,000
1/1/2061 To Balance b/d 6,68,500 30/12/2061 By Depreciation 1,26,000
30/12/2061 By Balance c/d 5,42,500
6,68,500 6,68,500
1/1/2062 To Balance b/d 5,42,500 1/4/2062 By Depreciation 31,500
1/4/2062 To Bank 9,00,000 1/4/2062 By bank (sale) 3,00,000
1/4/2062 By P/L a/c (loss) 2,11,000
30/12/2062 By Depreciation 1,35,000
30/12/2062 By Balance c/d 7,65,500
14,42,500 14,42,500
1/10/2000 To Balance b/d 7,65,500

CW 5___________
1st Machine
Cost (c) = 2,00,000
Depreciation = 6,00,000 × 20/100 = 1,20,000

2nd Machine
Cost (c) = 2,20,000
Depreciation = 20% of 2,20,000 = 44,000

Dr. MACHINERY ACCOUNT Cr.

[Under 1st Line Method]
Date Particulars Amount Date Particulars Amount
1st April 1999 To Cash a/c 6,00,000 31st Dec1999 By Depreciation a/c 90,000
31st Dec1999 By Balance c/d 5,10,000
6,00,000 6,00,000
1st Jan 2000 To Balance b/d 5,10,000 31st Dec2000 By Depreciation a/c 1,20,000
By Balance c/d 3,90,000
5,10,000 5,10,000
1st Jan 2000 To Balance b/d 3,90,000 31st Dec2001 By Depreciation a/c 1,21,000
1st Oct 2001 To Cash a/c 2,20,000 31st Dec2001 By Cash a/c 90,000
31st Dec2001 By Profit & Loss 10,000
31st Dec2001 By Balance c/d 3,89,000
6,10,000 6,10,000
1st Jan 2001 To Balance b/d 3,89,000

Principles of Accounting – I 120

CW 6___________
Depreciation chart
Year 1st Van 2nd Van 3rd Van Total
4,92,500
1998 49,250 49,250
4,43,250 6,25,000
1999 49,250 31,250 80,500
3,94,000 5,93,750 5,37,500
2000 24,625 62,500 26,875 24,624 + 89,375
3,69,375 5,31,250 5,10,625

Dr. DELIVERY VAN ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/1/1998 To bank (Purchase) 4,50,000 31/12/1998 By Depreciation 49,250
1/1/1998 To bank (repair) 42,500 31/12/1998 By Balance c/d 4,43,250
4,92,500 4,92,250
1/1/1999 To Balance b/d 4,43,250 31/12/1999 By Depreciation 80,500
1/7/1999 To bank 6,25,000 31/12/1999 By Balance c/d 9,87,750
10,68,250 10,68,250
1/1/2000 To Balance b/d 9,87,750 1/7/2000 By depreciation 24,625
1/7/2000 To bank 5,37,500 1/7/2000 By bank (sale) 82,500
1/7/2000 By P/L a/c (loss) 2,86,875
31/12/2000 By Depreciation 89,375
30/12/2000 By Balance c/d 10,41,875
15,25,250 15,25,250
1/1/2001 To Balance b/d 10,41,875

Dr. DEPRECIATION ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
31/12/1998 To delivery van 49,250 31/12/1998 By P/L a/c 49,250
49,250 49,250
31/12/1999 To delivery van 80,500 31/12/1999 By P/L a/c 80,500
80,500 80,500
1/7/2000 To delivery van 24,625 31/12/2000 By P/L a/c 1,14,000
31/12/2000 To delivery van 89,375
1,14,000 1,14,000

Total Cost = 4,50,000 + 42,500 = 4,92,500

CW 7___________
Total cost = 2,00,000 × 3 = Rs. 6,00,000
Year 1st car 2nd car 3rd car 4th car Total
2,00,000 2,00,000 2,00,000
1999 30,000 30,000 30,000 90,000
1,70,000 1,70,000 1,70,000
2000 40,000 40,000 40,000 1,20,000
1,30,000 1,30,000 1,30,000 2,20,000
2001 30,000 40,000 40,000 11,000 30,000 + 91,000
1,00,000 90,000 90,000 2,09,000

121 Accounting for Depreciation

Dr. CAR ACCOUNT Cr.
Date Particulars JF Amount Date Particulars JF Amount
1/4/1999 To bank 2,00,000 31/12/1999 By Depreciation 90,000
1/4/1999 To bank 2,00,000 31/12/1999 By Balance c/d 5,10,000
1/4/1999 To bank 2,00,000
6,00,000 6,00,000
1/1/2000 To Balance b/d 5,10,000 31/12/2000 By Depreciation 1,20,000
31/12/2000 By Balance c/d 3,90,000
5,10,000 5,10,000
1/1/2001 To Balance b/d 3,90,000 1/10/2001 By depreciation 30,000
1/1/2001 To bank 2,20,000 1/10/2001 By bank 90,000
1/10/2001 By P/L a/c (loss) 10,000
31/12/2001 By Depreciation 91,000
31/12/2001 By Balance c/d 3,89,000
6,10,000 6,10,000
1/1/2002 To Balance b/d 3,89,000

CW 8_______________
Year 1st Machine 2nd Machine 3rd Machine Total
75,000
25,000 50,000 50,000
2058 1,875 3,750 1,250 6,875
23,125 46,250 48,750 25,000
2059 2,500 5,000 5,000 1,250 13,750
20,625 41,250 43,750 23,750
2060 625 5,000 5,000 2,500 625 + 12,500
20,000 36,250 38,750 21,250

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/4/2058 To bank (Purchase) 75,000 31/12/2058 By Depreciation 6,875
1/10/2058 To bank (Purchase) 50,000 31/12/2058 By Balance c/d 1,18,125
1,25,000 1,25,000
1/1/2059 To Balance b/d 1,18,125 31/12/2059 By Depreciation 13,750
1/7/2059 To bank (Purchase) 25,000 31/12/2059 By Balance c/d 1,29,375
1,43,125 1,43,125
1/1/2060 To Balance b/d 1,29,375 31/3/2060 By depreciation 625
31/3/2060 To P/L a/ (Profit) 1,600 31/3/2060 By bank (sale) 21,600
31/12/2060 By Depreciation 12,500
31/12/2060 By Balance c/d 96,250
1,30,975 1,30,975
1/1/2061 To Balance b/d 96,250

CW 9___________
Let the original cost of the Delivery van be Rs. x
Depreciation for 1996 = 10% of x × 1 =
Depreciation for 1997 = 20% of x × 1 =×x =
Now,
x– – = 1,75,000

Principles of Accounting – I 122

 or, 10x – x – 2x = 17,50,000
or, 7x = 17,50,000
x = 2,50,000
 The original cost of the machine purchased on 1st July 1996 is Rs. 2,50,000.
Year 1st Machine 2nd Machine 3rd Machine Total
1,75,000 2,16,300
1998 50,000 32,445 82,445
1,25,000 1,83,855 1,72,000
1999 50,000 43,260 11,466.60 1,04,726.60
75,000 1,40,595 1,60,533.40
2000 50,000 43,260 34,400 1,27,660
25,000 97,335 93,688.40

Dr. DELIVERY VAN ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/1/1998 To Balance b/d 1,75,000 31/12/1998 By Depreciation 82,445
31/3/1998 To bank (Purchase) 2,16,300 31/12/1998 By Balance c/d 3,08,855
3,91,300 3,91,300
1/1/1999 To Balance b/d 3,08,855 31/12/1999 By Depreciation 1,04,726.67
1-9-1999 To bank (Purchase) 1,72,000 31/12/1999 By Balance c/d 3,76,128.33
4,80,855 4,80,855
1/1/2000 To Balance b/d 3,76,128.33 31/12/2000 By Depreciation 1,27,660
31/12/2000 By Balance c/d 2,48,468.33
3,76,128.33 3,76,128.33
1/1/2062 To Balance b/d 2,48,468.33

CW 10______________
Year Machine Total
70,000
2059 - 7,000 7,000
63,000
2060 - 6,300 6,300
56,700
2061 - 5,670 5,670
51,030

Dr. MACHINERY ACCOUNT Cr.

Year Particular JF Amount Date Particular JF Amount
1/1/2059 To Bank (purchase) 70,000 31/12/2059 By Depreciation 70,000
3112/2059 By Balance c/d 63,000
70,000 70,000
1/1/2060 To Balance b/d 63,000 31/12/2060 By Depreciation 6,300
31/12/2060 By Balance c/d 56,700
63,000 63,000
1/1/2061 To Balance b/d 56,700 31/12/2061 By Depreciation 5,670
31/12/2061 By Balance c/d 51,030
56,700 56,700
1/1/2062 To Balance b/d 51,030

Dr. DEPRECIATION ACCOUNT Cr.

Date Particular JF Amount Date Particular JF Amount
13/12/2059 To Machinery 7,000 31/12/2059 By P/L A/c 7,000

123 Accounting for Depreciation

 7,000 7,000
31/12/2060 To Machinery 6,300 31/12/2060 By P/L A/c 6,300
6,300 6,300
31/12/2061 To Machinery 5,670 31/12/2060 By P/L A/c 5,670

CW 11______________
Year 1st Machine 2nd Machine 3rd Machine Total
10000
2000 - 375 375
9625 6,000
2001 - 1443075 - 450 1,893.75
8181.25 5,550 5,000
2002 - 1227.18 - 832.5 - 187.5 2,247.18
6954.07 4,717.5 4,812.5

a)
Dr. MACHINERY ACCOUNT Cr.
Date Particular JF Amount Date Particular JF Amount
1/10/2000 To Bank(purchase) 10,000 31/12/2000 By Depreciation 375
31/12/2000 By Balance c/d 9,625
10,000 10,000
1/1/2001 To Balance b/d 9,625 31/12/2001 By Depreciation 1,893.75
1/7/2001 To Bank (purchase) 6,000 31/12/2001 By Balance c/d 13,731.25
15,625 15,625
1/1/2002 To Balance b/d 13,731.25 31/12/2002 By Depreciation 2,247.18
1/10/2002 To Bank (purchase) 5,000 31/12/2002 By Balance c/d 16,484.07
18,731.25 18,731.25
1/1/2003 To Balance b/d 16,484.07

b)
Dr. DEPRECIATION ACCOUNT Cr.
Date Particulars JF Amount Date Particulars JF Amount
31/12/2000 To Machinery 375 31/12/2000 By P/L A/c 375
375 375
31/12/2001 To Machinery 1,893.75 31/12/2001 By P/L A/c 1,893.75
1,893.75 1,893.75
31/12/2002 To Machinery 2,247.18 31/12/2002 By P/L A/c 2,247.18
2,247.18 2,247.18

CW 12______________
Year 1st Machine 2nd Machine 3rd Machine Total
60,000
2058 -6,000 6,000
54,000 25,000
2059 - 5,400 - 1,250 6,650
48,600 23,750 22,500
2060 - 3,645 - 2,375 - 5,62.5 6,582.5
44,955 2,13,375 2,1937.5
2061 - 21,37.5 - 2,193.75 4,331.25
19,237.5 19,743.75

Dr. MACHINERY ACCOUNT Cr.

Principles of Accounting – I 124

 Date Particulars JF Amount Date Particulars JF Amount
1/1/2059 To Balance b/d 54,000 31/12/2059 By Depreciation 6,650
1/7/2059 To Bank (purchase) 25,000 31/12/2059 By Balance c/d 72,350
79,000 79,000
1/1/2060 To Balance b/d 72,350 31/9/2060 By Depreciation 3,645
1/10/2060 To Bank (purchase) 22,500 31/9/2060 By Bank (sale) 16,500
31/9/2060 By P/L A/c (loss) 28,455
31/12/2060 By Depreciation 2,937.50
31/12/2060 By Balance c/d 43,312.50
1/1/2061 To Balance b/d 43,312.50 31/12/2061 By Depreciation 4,331.25
31/12/2061 By Balance c/d 38,981.25
43,312.50 43,312.50
1/1/2062 To Balance b/d 38,981.25

CW 13______________
Year 1st Machine 2nd Machine 3rd Machine Total
40,000
2000 - 2,000 2,000
38,000 30,000
2001 - 3,800 - 2,250 6,050
34,200 27,750 30,000
2002 - 3,420 - 2,081.25 - 750 2,081.25+4,170
30,780 25,668.75 2,92,750

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/2000 To Bank (purchase) 40,000 31/12/2000 By Depreciation 2,000
31/12/2000 By Balance c/d 38,000
40,000 40,000
1/1/2001 To Balance b/d 38,000 31/12/2001 By Depreciation 6,050
1/4/2001 To Bank (purchase) 30,000 31/12/2001 By Balance c/d 61,950
68,000 68,000
1/1/2002 To Balance b/d 61,950 1/10/2002 By Depreciation 2,081.25
1/10/2002 To Bank (purchase) 30,000 1/10/2002 By Bank (sale) 16,000
1/10/2002 By P/L A/c (loss) 9,668.75
31/12/2002 By Depreciation 4,170
31/12/2002 By Balance c/d 60,030
91,950 91,950
1/1/2003 To Balance b/d 60,030

CW 14__________
Working Table
I 1/4 I 3/4 II
2000 1 July – 20,000 1 July 60,000
Dep 1,000 Dep 3,000
2001 1 Jan 19,000 1 Jan 57,000
Dep 1,900 Dep 5,700
2002 1 Jan 17,100 1 Jan 51,300 31 October 30,000
Dep 1,425 Dep 5,130 Dep 500
Book Value 15,675

125 Accounting for Depreciation

 Sale 19,500
Profit 3,825

MACHINERY ACCOUNT
Dr. [Under written Down Value Method] Cr.
Date Particulars Amount Date Particulars Amount
1st July 2000 To Bank a/c 80,000 21st Dec By Depreciation a/c 4,000
2000
By Balance c/d 76,000
80,000 80,000
1st Jan, 2001 To Balance b/d 76,000 31st Dec By Depreciation a/c 7,600
2001
By Balance c/d 68,400
76,000 76,000
1st Jan 2002 To Balance b/d 68,400 31st Oct 2002 By Depreciation a/c
[68,400×1/4×10/100×10/12] 1,425
31st Oct 2002 To Profit & Loss a/c 3,825 31st Oct 2002 By Bank a/c (SP)
[Sales of 1/4the Magh] 19,500
31st Oct 2002 To Bank a/c 30,000 31st Dec By Depreciation a/c
2002 [68,400–17,100 × 10/100] 5,130
31st Dec By Depreciation a/c
2002 [30,000 × 10/100 × 2/12] 500
31st Dec By Balance c/d 75,670
2002
1,02,225 1,02,225
18th Jan2003 To Balance b/d 75,670

CW 15__________
Let the original cost be Rs x
Then,
In 1996, 10% of x = x =
Dep. In 1997 = x - = 10% of = × =
We have,
X- - = 4,05,000
Or, 100x – 10x – 9x = 4,05,00,000
Or, 81x = 4,05,00,000
 x = 5,00,000
Year 1ST Machine 2nd Machine Total
1996 1,04,000 3,96,000
-10,400 -39,600
1997 93,600 3,56,400
-9,360 -35,640
1998 84,240 3,20,760
-8,424 -32,076 40,500
1999 75,816 2,88,684 1,20,000+16,400
-3,790.8 -28,864.4 -6,820 3,790.8+34,868.4
2000 72,025.2 2,59,815.6 1,29,580
-25,981.56 -12,958 37,381.56
2,33,834.04 1,16,622

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/1/1998 To Balance b/d 4,05,000 31/12/1998 By Depreciation 40,500
31/12/1998 By Balance c/d 3,64,500

Principles of Accounting – I 126

 4,05,000 4,05,000
1/1/1999 To Balance b/d 3,64,500 1/7/1999 By Depreciation 3,790.8
1/7/1999 To Bank (purchase) 1,20,000 1/7/1999 By Bank (sale) 36,000
1/7/1999 To Bank (installation) 1/7/1999 By P/L A/c 36,025.2
31/12/1999 By Depreciation 35,688.4
31/12/1999 By Balance c/d 3,89,395.6
5,00,900 5,00,900
1/1/2000 To Balance b/d 3,89,395.6 31/12/2000 By Depreciation 38,939.56
31/12/2000 By Bal c/d 3,50,456.04
1/1/2001 To Balance b/d 3,50,456.04

CW 16__________
a) Here,
Original Price (P) = 40,000 + 2,000 = 42,000
Depreciated Price (D) = 21,504
Rate (R) =?
No. of Years (n) =3

We have,
D =P
Or, 21504 = 42000x
Or, 512000 = (100 – R) 3
Or, 80 = 100 – R
 R = 20%
Year Machine Total
42,000
2000 - 8,400 8,400
33,600
2001 - 6,720 6,720
26,880
2002 - 5,376 5,376
21,504

b)
Dr. MACHINERY ACCOUNT Cr.
Date Particulars JF Amount Date Particulars JF Amount
1/1/2000 To Bank (purchase) 40,000 31/12/2000 By Depreciation 8,400
1/1/2000 To Bank (erection) 2,000 31/12/2000 By Balance c/d 33,600
42,000 42,000
1/1/2001 To Balance b/d 33,600 31/12/2001 By Depreciation 6,720
31/12/2001 By Balance c/d 26,880
33,600 33,600
1/1/2002 To Balance b/d 26,880 31/12/2002 By Depreciation 5,376
31/12/20002 By Balance c/d 21,504
26,880 26,880
1/1/2002 To Balance b/d 21,504

c)
Dr. DEPRECIATION ACCOUNT Cr.
Date Particulars JF Amount Date Particulars JF Amount
31/12/2000 To Machinery 8,400 31/12/2000 By P/L A/c 8,400
8,400 8,400
31/12/2001 To Machinery 6,720 31/12/2001 By P/L A/c 6,720

127 Accounting for Depreciation

 6,720 6,720
31/12/2002 To Machinery 5,376 31/12/2002 By P/L A/c 5,376
5,376 5,376

HW 1___________
Annual Depreciation of Plant = = = Rs.7,200

Dr JOURNAL ENTRIES Cr
Date Particulars LF Dr. Amount Cr. Amount
2059-01-01 Plant a/c................................................................................
Dr 40,000
To Bank a/c 40,000
(Being plant purchase)
2059-12-31 Depreciation a/c...............................................................Dr 7,200
To Plant a/c 7,200
(Being Depreciation charge on plant)
2061-12-31 Depreciation a/c...............................................................Dr 7,200
To Plant a/c 7,200
(Being Depreciation charge on plant)
2062-12-31 Depreciation a/c............................................................... 7,200
To Plant a/c 7,200
(Being Depreciation charge on plant)
2063-12-31 Depreciation a/c............................................................... 7,200
To Plant a/c 7,200
(Being Depreciation charge on plant)
2064-12-31 Depreciation a/c...............................................................Dr 7,200
To Plant a/c 7,200
(Being Depreciation charge on plant)

b)
Dr. PLANT ACCOUNT Cr.
Date Particulars Amount Date Particulars Amount
2059-01-01 To Bank a/c 40,000 2059-12-31 By Depreciation a/c 7,200
By Balance c/d 32,800
40,000 40,000
2060-01-01 To Balance b/d 32,800 2060-12-31 By Depreciation a/c 7,200
By Balance c/d 25,600
32,800 32,800
2061-01-01 To Balance b/d 25,600 2061-12-31 By Depreciation a/c 7,200
By Balance c/d 18,400
25,600 25,600
2062-01-01 To Balance b/d 18,400 2062-12-31 By Depreciation a/c 7,200
By Balance c/d 11,200
18,400 18,400
2063-01-01 To Balance b/d 11,200 2063-12-31 By Depreciation a/c 7,200
By Balance c/d 4,000
11,200 11,200
2064-01-01 To Balance b/d 4,000

HW 2___________
Here,
Cost of machine = Rs. 20,000
Overhauling cost = Rs. 6,000

Principles of Accounting – I 128

 Scrap value = Rs. 1,000
Estimated life (Years) =5
Now,
Total cost of machine = Cost of machine + Overhauling cost = Rs. 20,000 + Rs. 6,000 = Rs. 26,000
Annual Depreciation = = = = Rs. 5,000 per annum

DR. MACHINERY ACCOUNT CR.

Date Particulars JF Amount Date Particulars JF Amount
1/1/2001 To bank 26,000 31/12/2001 By Depreciation 5,000
31/12/2001 By Balance c/d 21,000
26,000 26,000
1/1/2002 To Balance b/d 21,000 31/12/2002 By Depreciation 5,000
31/12/2002 By Balance c/d 16,000
21,000 21,000
1/1/2003 To Balance b/d 16,000 31/12/2003 By Depreciation 5,000
31/12/2003 By Balance c/d 11,000
16,000 16,000
1/1/2004 To Balance b/d 11,000

HW 3___________
Here ,
Depreciation for 1st X-ray machine = = = 72000 per annum
Year 1st Machine 2nd Machine Total
4,50,000
2059 54,000 54,000
3,96,000
2060 72,000 72,000
3,24,000 6,00,000
2061 60,000 60,000
5,40,000

Dr. X- RAY MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/4/2059 To bank 4,50,000 30/12/2059 By Depreciation 54,000
30/12/2059 By Balance c/d 3,96,000
4,50,000 4,50,000
1/1/2060 To Balance b/d 3,96,000 30/12/3060 By Depreciation 72,000
30/12/2060 To P/L A/c (Gain) 26,000 30/12/2060 By Bank (sale) 3,50,000
30/12/2060 To bank 6,00,000 30/12/2060 By Balance c/d 6,00,000
10,22,000 10,22,000
1/1/2061 To Balance b/d 6,00,000 30/12/2061 By Depreciation 60,000
30/12/2061 By Balance c/d 5,40,000
6,00,000 6,00,000
1/10/2000 To Balance b/d 5,40,000

HW 4___________
I) Annual Depreciation of Machine = =
= = 12,000
II) Annual Depreciation of Machine = =
= = 11,000

129 Accounting for Depreciation

 MACHINERY ACCOUNT
Dr Straight Line Method Cr
Date Particulars Amount Date Particulars Amount
2058-01-01 To Bank a/c 40,000 2058-12-31 By Depreciation a/c 3,000
By Balance c/d 37,000
40,000 40,000
2059-01-01 To Balance b/d 37,000 2059-12-31 By Depreciation a/c 17,500
2059-07-01 To Bank a/c 60,000 By Balance c/d 79,500
97,000 97,000
2060-01-01 To Balance b/d 79,500 2059-12-31 By Depreciation a/c 11,000
To Profit & Loss a/c 1,500 2059-01-01 By Bank a/c 26,500
(1st Machine sold
By Balance c/d 43500
81,000 81,000
2061-01-01 To Balance b/d 43,500

HW 5_______________
Year 1st Machine 2nd Machine 3rd Machine Total
60,000
2000 3,000 3,000
57,000 45,000
2001 6,000 4,400 10,400
51,000 40,600 32,600
2002 6,000 4,400 1,550 11,950
45,000 36,200 31,050 78,200
2003 4,400 3,100 7,500

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/2000 To bank 60,000 31/12/2000 By Depreciation 3,000
31/12/2000 By Balance c/d 57,000
60,000 60,000
1/1/2001 To Balance b/d 57,000 31/12/2001 By Depreciation 10,400
1/1/2001 To bank 45,000 31/12/2001 By Balance c/d 91,600
1,02,000 1,02,000
1/1/2002 To Balance b/d 91,600 31/12/2002 By Depreciation 11,950
1/7/2002 To bank 32,600 31/12/2002 By bank (sale) 46,200
31/12/2002 To P/L a/c (Gain) 1,200 31/12/2002 By Balance c/d 67,250
1,25,400 1,25,400
1/1/2003 To Balance b/d 67,250

HW 6_______________
Year 1st Machine 2nd Machine 3rd Machine Total
60,000
1998 3,000 3,000
57,000
1999 6,000 6,000
51,000 40,000 60,000
2000 4,500 2,000 1,500 4,500 + 3,500

Principles of Accounting – I 130

 38,000 58,500

Dr MACHINERY ACCOUNT Cr
Date Particulars JF Amount Date Particulars JF Amount
1/7/1998 To bank (Purchase) 40,000 31/12/1998 By Depreciation 3,000
To bank (Overhaul) 20,000 31/12/1998 By Balance c/d 57,000
60,000 60,000
1/1/2001 To Balance b/d 57,000 31/12/1999 By Depreciation 6,000
31/12/1999 By Balance c/d 51,000
57,000 57,000
1/1/2000 To Balance b/d 51,000 1/10/2000 By Depreciation 4,500
1/7/2000 To bank 40,000 1/10/2000 By bank 10,000
1/10/2000 To bank 60,.000 1/10/2000 By P/L A/c (loss) 36.500
31/12/2000 By Depreciation 3,500
31/12/2000 By Balance c/d 96,500
1,51,000 1,51,000
1/1/2001 To Balance b/d 96,500

HW 7_______________
Year 1st Machine 2nd Machine Total
30,000 60,000
30,000 60,000 50,000
1998 2,250 4,500 1,250 8,000
27,750 55,500 48,750
1999 3,000 6,000 5,000 14,000
24,750 49,500 43,750
2000 1,500 6,000 5,000 1,500 + 11,000
23,250 43,500 38,750

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/4/1998 To bank (Purchase) 90,000 31/12/1998 By Depreciation 8,000
1/10/1998 To bank (Purchase) 50,000 31/12/1998 By Balance c/d 1,32,000
1,40,000 1,40,000
1/1/1999 To Balance b/d 1,32,000 31/12/1999 By Depreciation 14,000
31/12/1999 By Balance c/d 1,18,000
1,32,000 1,32,000
1/1/2000 To Balance b/d 1,18,000 1/7/2000 By depreciation 1,500
1/7/2000 To P/L a/ (Profit) 4,250 1/7/2000 By bank (sale) 27,500
31/12/2000 By Depreciation 11,000
31/12/2000 By Balance c/d 82,250
1,22,250 1,22,250
1/1/2061 To Balance b/d 82,250

HW 8_______________
Year I II III IV V VI Total
3,00,000 3,00,000 3,00,000 3,00,000 3,00,000
2059 45,000 45,000 45,000 45,000 45,000 2,25,000
2,55,000 2,55,000 2,55,000 2,55,000 2,55,000 4,00,000
2060 60,000 60,000 60,000 60,000 45,000 20,000 45,000 + 2,60,000

131 Accounting for Depreciation

 1,95,000 1,95,000 1,95,000 1,95,000 2,10,000 3,80,000
2000 60,000 60,000 60,000 60,000 80,000 3,20,000
1,35,000 1,35,000 1,35,000 1,35,000 3,00,000

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/4/2059 To bank (Purchase) 15,00,000 31/12/2059 By Depreciation 2,25,000
31/12/2059 By Balance c/d 12,75,000
15,00,000 15,00,000
1/1/2060 To Balance b/d 12,75,000 1/10/2060 By Depreciation 45,000
1/10/2060 To bank (Purchase) 4,00,000 1/10/2060 By bank 1,20,000
1/10/2060 By P/L a/c (loss) 90,000
31/12/2060 By Depreciation 2,60,000
31/12/2060 By Balance c/d 11,60,000
16,75,000 16,75,000
1/1/2061 To Balance b/d 11,60,000 31/12/2061 By Depreciation 3,20,000
31/12/2061 By Balance c/d 8,40,000
11,60,000 11,60,000
1/1/2062 To Balance b/d 8,40,000

HW 9___________
Let the original cost be Rs x
Given,
Dep. In 1998 = 10% of x = x =
Dep. In 1999 = 20% of x = x =
Dep. In x- = 42000
Or, 10x – x-2x = 420000
 The original cost of the machine purchased on July 1998 is Rs 60000
Year 1st machine 2nd machine 3rd machine Total
42,000
2000 - 12,000 12,000
30,000 50,000
2001 - 12,000 - 7,500 19,500
18,000 42,500 90,000
2002 - 12,000 - 10,000 - 6,000 28,000
6,000 32,500 84,000

Dr. MACHINERY ACCOUNT Cr.

Date Particular JF Amount Date Particular JF Amount
1/1/2000 To Balance b/d 42,000 31/12/2000 By Depreciation 12,000
31/12/2000 By Balance c/d 30,000
42,000 42,000
1/1/2001 To Balance b/d 3,000 31/12/2001 By Depreciation 19,500
1/3/2001 To Back (purchase) 50,000 31/12/2001 By Balance c/d 60,500
80,000 80,000
1/1/2002 To Balance b/d 60,500 31/12/2002 By Depreciation 28,000
1/9/2002 To Bank (purchase) 90,000 31/12/2002 By Balance c/d 1,22,500
1,50,500 1,50,500
1/1/2003 To Balance b/d 1,22,500

HW 10__________
Let the original cost of the machine be Rs. X
Then,

Principles of Accounting – I 132

 Dep. in 1996 = 10% of x = x =
Dep. in 1997 = 10% of x = x =
Now,
x- = 64,000
or,10x-2x = 6,40,000
8x = 64,000
x = Rs. 80,000
The original cost of the machine purchased on 1st Jan. 1996 is Rs 80,000
Year 1st Machine 2nd Machine Total
20,000 60,000
1996 -2,000 -6,000
18,000 54,000
1997 -2,000 -6,000
16,000 48,000
1998 -2,000 -6,000 8,000
14,000 42,000 60,000
1999 -1,000 -6,000 -3,000 1,000+9,000
13,000 36,000 57,000
2000 -6,000 -6,000 12,000
30,000 51,000

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particular JF Amount
1/1/1998 To Balance b/d 64,000 31/12/1998 By Depreciation 8,000
31/12/1998 By Balance c/d 56,000
64,000 64,000
1/1/1999 To Balance b/d 56,000 31/12/1999 By Depreciation 1,000
1/7/1999 To Bank (purchase) 60,000 1/7/1999 By Bank (sale) 13,500
1/7/1999 To P/L a/c (gain) 500
31/12/1999 By Depreciation 9,000
1/12/1999 By Balance c/d 93,000
1,16,500 1,16,500
1/1/2000 To Balance b/d 93,000 31/12/2000 By Depreciation 12,000
31/12/2000 By Balance c/d 81,000
93,000 93,000
1/1/2001 To Balance b/d 81,000

HW 11__________
Dr. MACHINERY ACCOUNT Cr.
Date Particulars Amount Date Particulars Amount
01/01/59 To Bank a/c 100,000 31/12/059 By Depreciation 10,000
31/12/059 By Balance c/d 90,000
100,000 100,000
01/01/060 To Balance b/d 90,000 31/12/060 By Depreciation 9,000
31/12/060 By Balance c/d 81,000
90,000 90,000
01/01/061 To Balance b/d 81,000 31/12/061 By Depreciation 81,000
By Balance c/d 72,900
81,000 81,000
01/11/062 To Balance b/d 72,900

HW 12______________
Year 1st Machine 2nd Machine 3rd machine Total

133 Accounting for Depreciation

 33,000
2059 -3,712.50 3,712.50
29,287.50 22,000
2060 -4,393.125 -1,650 6,043.12
24,894.375 20,350 11,000
2061 -3,734.16 -3,052.50 -412.50 7,199.16
21,160.21 17,297.50 10,587.5

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/4/2059 To Bank (purchase) 33,000 31/12/2059 By Depreciation 3,712.50
31/12/2059 By Balance c/d 29,287.50
33,000 33,000
1/1/2060 To Balance b/d 29,287.50 31/12/2060 By Depreciation 6,043.12
1/7/2060 To Bank (purchase) 20,000 31/12/2060 By Balance c/d 45,244.38
1/7/2060 To Bank (erection) 2,000
51,287.50 51,287.50
1/1/2061 To Balance b/d 45,244.38 31/12/2061 By Depreciation 7,199.16
1/10/2061 To Bank (purchase) 10,000 31/12/2061 By Balance c/d 49,045.22
1/10/2061 To Bank (erection) 1,000
56,244.38 56,244.38
1/1/2062 To Balance b/d 49,045.22

Dr. DEPRECIATION ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
31/12/2059 To Machine 3712.50 31/12/2059 By P/L A/c 3712.50
3712.50 3712.50
31/12/2060 To Machine 6043.12 31/12/2060 By P/L A/c 6043.12
6043.12 6043.12
31/12/2061 To machine 7199.16 31/12/2061 By P/L A/c 7199.16
7199.6 7199.6

HW 13______________
Year 1st Building 2nd Building 3rd Building Total
6,48,000
2059 - 64,800 64,800
5,83,200 4,00,000
2060 - 58,320 - 30,000 88,320
5,24,880 3,70,000 2,50,000
2061 - 52,488 - 37,000 - 6,250 95,738
4,72,392 3,33,000 2,43,750

BUILDING ACCOUNT
Date Particulars JF Amount Date Particulars JF Amount
1/1/2059 To Balance b/d 6,48,000 31/12/2059 By Depreciation 64,800
31/12/2059 By Balance c/d 5,83,200
6,48,000 6,48,000
1/1/2060 To Balance b/d 5,83,200 31/12/2060 By Depreciation 88,320
1/4/2060 To Bank 4,00,000 31/12/2060 By Balance c/d 8,94,880
9,83,200 9,83,200
1/1/2061 To Balance b/d 8,94,880 31/12/2061 By Depreciation 95,738
30/9/2061 To Bank 2,50,000 31/12/2061 By Balance c/d 10,49,142

Principles of Accounting – I 134

 11,44,880 11,44,880
1/1/2062 To Balance b/d 10,49,142

HW 14______________
Date 1st Machine 2nd Machine 3rd Machine
2058 1 Baisakh 80,000
Depreciation 8,000
2059 1 Baisakh 72,000 1 Kartik 30,000
Depreciation 7,200 Depreciation 1,500
2060 1 Baisakh 64,800 1 Baisakh 28,500 1 Shrawan 60,000

Depreciation 6,480 Depreciation 712.50 Depreciation 4,500

27,787.50
Sale 26,500
Loss 1,287.50
2061 1 Baisakh 58320 1 Baisakh 55,500
Depreciation 5832 Depreciation 5,550
2062 1 Baisakh 52488 1 Baisakh 49,950

Dr. MACHINERY ACCOUNT Cr.

Date Particulars Amount Date Particulars Amount
01/01/058 To Balance a/c 80,000 31/12/058 By Depreciation a/c 8,000
By Balance c/d 72,000
80,000 80,000
01/01/059 To Balance b/d 72,000 31/12/059 By Depreciation a/c 8700
01/07/059 To Balance a/c 30,000 By Balance c/d 93,300
1,02,000 1,02,000
01/01/060 To Balance c/d 93,300 31/12/059 By Depreciation a/c 11,692.50
01/04/060 To Bank a/c 60,000 (6,480 + 71,250 + 4,500)
By Cash (sale) 26,500
By P/L a/c (loss) 1,287.50
By Balance c/d 1,13,820
1,53,300 1,53,300
01/01/061 To Balance b/d 1,13,820 31/12/061 By Depreciation 11,382
By Balance c/d 1,02,438
1,13,820 1,13,820
01/01/062 To Balance b/d 1,02,438

HW 15__________
DEPRECIATION TABLE
Yr I Sold I Unsold II III
2000 1 April 18,000 1 April 72,000 1 October 60,000
Depreciation 1,350 Depreciation 54,000 Depreciation 1,500
2001 1 January 16,650 1 January 66600 1 October 58500 1 July 100000
Depreciation 1,248.75 Depreciation 6660 Depreciation 5850 Depreciation 5000
BV 15,401.25
CV 5,600
Loss 9,801.25

135 Accounting for Depreciation

 2002 1 January 59,940 1 October 52,650 1 January 95000
Depreciation 5,994 Depreciation 5,265 Depreciation 9500
2003 1 January 59,946 1 October 47,385 1 January 85,500

Dr. MACHINERY ACCOUNT Cr.

Date Particulars Amount Date Particulars Amount
01/04/2000 To Bank a/c 90,000 31/12/2000 By Depreciation 8,250
01/07/2000 To Bank a/c 60,000 By Balance c/d 1,41,750
1,50,000 1,50,000
01/01/2001 To Balance b/d 1,41,750 31/12/2001 By Depreciation 18,758.75
01/07/2001 To Bank a/c 1,00,000 By Balance a/c (sale) 5,600
By P/L a/c (loss) 9801.25
By Balance c/d 2,07,590
2,41,750 2,71,750
01/01/2002 To Balance b/d 2,07,590 31/12/2002 By Depreciation a/c 20,759
By Balance c/d 1,86,831
2,07,590 2,07,590
01/01/2003 To Balance b/d 1,86,831

HW 16______________
Year 1st Machine 2nd Machine Total
20,000 60,000
1999 -1,000 -3,000 4,000
19,000 57,000
2000 -1,900 -5,700 7,600
17,100 51,300 60,000
2001 -1,282.5 -5,130 -1,500 6,630+1,282.5
15,817.50 46,170 58,500
2002 -4,617 -5,850 10,467

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/1999 To Bank (purchase) 80,000 31/12/1999 By Depreciation 4,000
31/12/1999 By Balance c/d 76,000
80,000 80,000
1/1/2000 To Balance b/d 76,000 31/12/2000 By Depreciation 7,600
31/12/2000 By Balance c/d 68,400
76,000 76,000
1/1/2001 To Balance b/d 68,400 1/10/2001 By Depreciation 1,282.50
1/10/2001 To Bank (purchase) 60,000 1/10/2001 By Bank (sale) 9,500
1/10/2001 By P/L A/c (loss) 6,317.50
31/12/2001 By Depreciation 6,630
31/12/2001 By Balance c/d 1,04,676
1,28,400 1,28,400
1/1/2002 To Balance b/d 1,04,676 31/12/2002 By Depreciation 10,467
31/12/2002 By Balance c/d 94,203
1,04,616 1,04,616
1/1/2002 To Balance b/d 94,203

HW 17______________
Year 1st Machine 2nd Machine Total
20,000 40,000 80,000

Principles of Accounting – I 136

 2000 -1,000 -2,000 -1,333.33 4,333.33
19,000 38,000 78,666.67
2001 -1,900 -3,800 -7,866.67 13,566.67
17,100 34,200 70,800
2002 -427.5 -3,420 -7,080 427.5+10,500
1,66,72.5 30,780 63,720

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/7/2000 To Bank (purchase) 60,000 31/12/2000 By Depreciation 4,333.33
1/10/2000 To Bank (purchase) 80,000 31/12/2000 By Balance c/d 1,35,666.67
1,40,000 1,40,000
1/1/2001 To Balance b/d 1,35,666.67 31/12/2001 By Depreciation 13,566.67
31/12/2001 By Balance c/d 1,22,100
1,35,666.67 1,35,666.67
1/12002 To Balance b/d 1,22,100 31/3/2002 By Depreciation 427.5
31/3/2002 By Bank (sale) 11,600
31/3/2002 By P/L A/c (loss) 5,072.50
31/12/2002 By Depreciation 10,500
31/12/2002 By Balance c/d 94,500
1,22,100 1,22,100
1/1/2003 To Balance b/d 94,500

HW 18__________
Let Original cost on 1 July 1998 = Rs.100
Depreciation for 1998 for 6 months = 10% of 100 × = Rs.5
Depreciation for 1999 for 1 year = (100 – 5) × 10% = 9.5
Depreciation value on 1 Jan 2000 = 100 – 5 – 9.5 = 85.5
DV Original cost
85.5 100
85500 ?
= 100 × = Rs.100,000
DEPRECIATION TABLE
Year I Sold I Unsold II
1998 1 July 20,000 1 July 80,000
Depreciation 1,000 Depreciation 4,000
1999 1 January 19,000 1 January 76,000
Depreciation 1,900 Depreciation 7,600
2000 1 January 17,100 1 January 68,400 1 October 50,000
Depreciation 1,282.50 Depreciation 8,640 Depreciation 1,250
15,817.50
Sale 13,500
Loss 2,317.50
2001 1 January 61,560 1 January 48,750
Depreciation 6,156 Depreciation 4,875
2002 1 January 55,404 1 January 43,875
Depreciation 5,540.4 Depreciation 4,875
2003 49,863.60 39,487.50

Dr. MACHINERY ACCOUNT Cr.

Date Particulars Amount Date Particulars Amount
01/01/2000 To Balance b/d 85,500 31/12/2000 By Depreciation a/c 9,372.5
01/09/2000 To Bank a/c 50,000 By Bank a/c (sale) 13,500

137 Accounting for Depreciation

 By P/L a/c (loss) 2,317.50
By Balance c/d 1,10,310
1,35,500 1,35,500
01/01/2001 To Balance b/d 1,10,310 31/12/2001 By Depreciation a/c 11,031
By Balance c/d 99,279
1,10,310 1,10,310
01/01/2002 To Balance b/d 99,279 31/12/2002 By Depreciation a/c 9,927.90
By Balance c/d 89,351.10
99,279 99,279
01/01/2003 To Balance b/d 89,351.10

HW 19__________
Here
Let the Original Price be Rs. X
In 2057, 10% of X x = x x =

In 2058, Book Value =x- =

10% of = x =
Now, - =

We have, = 166500
Or, 333x = 66600000
x = Rs. 200000

Year 1st Machine 2nd machine Total

40,000 1,60,000
2057 -3,000 -12,000 15,000
37,000 1,48,000
2058 -3,700 -14,800 18,500
33,300 1,33,200
2059 -3,330 -13,320 16,650
29,970 1,19,880
2060 -2,997 -11,988 14,985
26,973 1,07,892 50,000
2061 -1,348.65 -10,789.2 -2,500 1,348.65+13,289.2
25,624.35 97,102.8 47,500

Dr. MACHINERY ACCOUNT Cr.

Date Particulars JF Amount Date Particulars JF Amount
1/1/2059 To Balance b/d 1,66,500 31/12/2059 By Depreciation 16,650
31/12/2059 By Balance c/d 149,850
1,66,500 1,66,500
1/1/2060 To Balance b/d 1,49,850 31/12/2060 By Depreciation 14,985
31/12/2060 By Balance c/d 1,34,865
1,49,850 1,49,850
1/1/2061 To Balance b/d 1,34,865 1/7/2061 By Depreciation 1,348.65
1/7/2061 To P/L A/c (gain) 875.65 1/7/2061 By Bank (sale) 26,500
1/7/2061 To Bank (purchase) 50,000 31/12/2061 By Depreciation 13,289.2
31/12/2061 By Balance c/d 1,44,602.8
1,85,740.65 1,85,740.65
1/1/2062 To Balance b/d 1,44,602.8

Principles of Accounting – I 138

HW 20__________
a) Original Cost (P) = Rs.6,500 + 1,500
Depreciated Value (D) = Rs.8,000
Rate (R) =?
No. of years (N) =3
We have,
D =P
2,744 = 8,000
2,744 = 8,000
2,744 × 100 × 100 × 100 = 8,000 (100 – R)3
343000 = (100 – R)3
703 = (100 – R)3
70 = 100 – R
R = 30%
b)
Dr. MACHINERY ACCOUNT Cr.
Date Particulars Amount Date Particulars Amount
1st Year To Bank a/c 8,000 1st Year By Depreciation 2,400
By Balance c/d 5,600
8,000 8,000
2nd Year To Balance b/d 5,600 2nd Year By Depreciation 1680
By Balance c/d 3,920
5,600 5,600
3rd Year To Balance b/d 3,920 3rd Year By Depreciation 1176
By Balance c/d 2744
3,920 3,920
4th Year To Balance b/d 2,744

139 Accounting for Depreciation