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    21 views117 pages

    Accounts Topics Till 17 November 2023

    Uploaded by

    Jishan Enterprises Ltd.

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 117
    actions Rs \ {evel aoeouning ecu from ne ftw 50:000 ; : fh 30,000 (a) Mohan commenced business with 025 zo. . (b) Purchased goods for cast 12,000 ° ' (¢) Purchased goods on aon or 2,000 | (0) Sold goods (cost Rs 10, 15,000 (@) Bought {urniture on credit (0 Paid cash to a creditor Soutlon folowing transactions of Prove that the accounting equation is satisfied in all the Saas | (a) Commenced business with cash Rs 36,000. | (b) Paid rent in advance Rs 300. (©) Purchased goods for cash Rs 18,000 and credit Rs 12,000. (Sold goods for cash Rs 18,000 costing Rs 12,000. (©) Paid salary Rs 300 and salary outstanding As 60. % () Bought motorcycle for personal use 3,000. TY. Me X had the following transactions: (2) Commenced business with cash Rs 30,000. (0) Purchased goods for cash Rs 12,000 and credit Rs 18,000. (©) Sold goods for cash Rs 24,000, costing As 18,000. (4) Rent paid Rs 300. (e) Rent outstanding Rs 60. () Bough! funiture Rs 3,000 on credit | (9) Bought rettigerator for. personal use As 3,000 (h) Purchased building for cash Rs 12,000. | Use accounting equation to show the effect of the above tra liabilities and capital and also show fis balary ems & Show the aocounting equation on the basis of the follow @ balance sheet of the last new equation balance (a) Mohan commenced business with (0) Purchased goods on credit (©) Withdrew for private use ‘ (d) Purchased goods for cast (e) Paid wages () Paid to creditors (g) Sold goods on credit al par (h) Sold goods for cash (cost price was Rs 1,800) | (i) Purchased furniture for Show the effect of followhny wansactions on Accounting Equation and a Balance Sheet: (a) Started business with cash amounting to Rs 35,000 and goods (b) Salaries paid (c) Wages outstanding (4) Prepaid insurance paid ©) Intorest due but not paid (9) Rent paid in advance 25,300 10,000 4,800 New Equation | 25,000 + + (1,500 o oO Hi g transactions: R 8,500 lowint ion from the folle . " 50,000 New Equation | 25,000 + \ Develop accounting equat ZZ Mohan commenced business with cash 30,000, 20,006: (b) Purchased goods for cash (c) Purchased goods on credit 412,000 (d) Sold goods (cost Rs 10,000) for 2,000 (e) Bought furniture on credit 45,000 (f) Paid cash to a creditor Soution = bility + Capital Transaction Assets , 7 ee Capital Cash + — Stock + Fumiure @) 50,000 + ° + 0 * 0 + 50,000 New Equation | 50,000 + oo + 0 0 +: 50,000 d (-) 30.000 + 30000 «+ oF 0 + 2 New Equation | 20,000 + 90,000 + 0 = 0 + 50,000 & : 0 + 20,000 0 = 20,000 + 0 os New Equation | 20,000 + 50,000 + 0 = — 20,000 + $0,000 ) 42,000 - 10,000 + o = + 2,000 (ey Now Eavation | 32,000 + 40,000 0 = 20,000 + 52,000 - o + o + 200 = 2,000 + 0° Mw Ewaton | | 32000 + 40.000 +2000 = «2,000 + 52,000 New Eanes} “ * ° + 0 = — -15,000 + 0 lew Equation | 17,000 + 40,000 + 2000 = 7,000 + 52,000 fot. pps Teed Bole * 20Lt Apr ol Bought goods for cash 850,000. Apr 02 Sold gacds 1 cash 90,000 \ Ap 03 Boughe goods for credit fram Govind 215,000 \ Apr 0 Sold goods on credit to Roy 210,000 \ Noe % Raced feors Roy €7,600. = \ pe tn Govind &5,000 1B = Lines Apr? Bought furniture for cach @ 3,000 foe TE * | Transactions of Ramesh tor Apel are given below oumaline them. A tse Paster Serge et Oe % Ramesh sared txcness wih cath | 12808 7.900 3 cash = + | Drew eaah tom bank tex office ~ 13 | ‘Sol 6 Krenn goons on er ie. 20 | Bought of Shyam goods on cect oe ie 24 | Recened fm Kristen 4 28 | Paid Shyam cast a | Dedeount alowed 2 30 | Cash sales for the roth (ay ars | Pac rent o | pat etary fi 1 B-lette = G» Record the tol actions of A & Co. in journal proper form, Maal Kea += Jan 1 Assets verbena Cash 19 bans 000 Steck of goods yey Machunery 20009 Fumaure 5.000 Ray & Co (amount duo to A & Co) 2,000 Sen & Co (amount duo to A & Co) 3,000 Liaovities: Loan trom State Bank of tndia (SB) 30,000 Amount due to Viwanath & Co 5.000 dan 2 ought goods on cred from Patot & Co 2,000 Jan. 3 Sold goods tor cash to Bose & Co. 's00 Jan. 4 — Sold goods to Roy & Co. on credit 1,000 Jan 5 Received Tom Roy & Co, in hil setiement of amount due on 1 January . 1,900 Jan 6 Paymont made to Vishwanath & Co. by cheque (Vishwanath & Co. alowed discount of £50). 4.950 Jan 8 Old furniture sold for cash (book valve, €300) 350 Jan 10 Bought goods for cash 1,000 Jan 11 Received cheque tram Sen & Co., deposited in bank 3,000 Jan, 12. Paid for repairs to machinery 200 Jan 13° Bought goods trom Vishwanath & Co. on credit 2,000 Paid carlage on these goods o* 100 Jan 14 Received cheque from Roy & Co., deposited in bank (discount allowed to them, %50) 950 Jan. 17 P&id cheque to Viswanath & Co. . 2,000 Jan 18 Bank intimates that cheque received Irom Roy & Co. has been returned unpad 950 Jan 19 Sola goods for cash to Dey & Co 2,000 Jan. 21 Cast deposited wn bank 1,000 Jan 22 Paid municipal taxes in cash 100, Jan. 25 Borrowed from New Age Investment Co., for erecting own premises (amount deposited with bank) 23,000, Jan, 26 Paid tor advertisements: 3 Jan. 28° Sold old newspapers b2rte Jan. 31 Paid rent by cheque Hr » 4 gle > 500 Paid salaries for the month s00 500 Drawn by Mr. A out of bank for peonal use following w ib Rilememee ‘ m trons in the books of x trader La ee ts xii Reo Jan 1 ay Be ah Neen ate stabs Stock of Goods. 120,00 Farnimare 82.000 uieng 10,000 Sundry Debeors Vejey €2.000 , ‘anit’ ?1.000, Mads £2,000 Credit Balances om am J 20)) Sundry Creditors ‘Amana ®,000 {Loan from Bab hs 810000 tions in the month of January, 20)) “ orn cash Le 203s rade discount and cash discount 2 era ceed (880 rom Voy hn {a8 06 Peed gon an hha 300 ae OF Panhend fan Yom Mew be 85 the factory and 1 mee 12. Seid gods Ratan on re Jan 18. Raby case on sccm mata Jan. 18 Sold goods to R 1.00 mo Ra fo ca #1000 2 tae 2 Ped yw as lam 21 Pad Anand 8 fl sth 11 Jit 26 etree om Mabe ' - 2. jan 28 Paad to Madly interest on kuan 8500 ~e 13 Jan 31 Sold Goods for cash ®500 few ° — pond £100 as carage for beinging the plat cheng: * M4 an M1 Withrow goowts fon banca for petsomal wie €200 os rer recina tis venti ow - {in proper farm, post the Ledger and tabe oud a Trin! Balance 2002 ; Rs Jan | Assets-Cash inniand Fis. 200, Cash at bank Ps. 6,809; Stocks of Goods | is, 4,000; Machinery Fs. 10.000; Furniture Fes 1,000, M's Narain Bros. | owe Rs. 1,500, M/s B.K Bros. owe Fis, 2,500 Liabilties: Loan Ris. 5,000; Sum owing 1o Jacob Bros Lid Rs 2,000 | + 2| Bought goods on credit rom Samuel & Co, | \.000 + | Sold goods tor cash to Dri & Cov 400 + 4] Sold goods to Narain Bros on crocit | 1-000 + § | Recetved teom tarain Bros. n bul cathomnent of amount due on January 1] 1.480 + 6 | Payment made to Jacob Bros, Lid. by cheque and | 975 thay allowed discount 25 + 9| Old furniture sold for cash 100 + 10 | Bough! gosds for cash 750 + 11] BK. Bros, paid try cheque, the cheque deposited the bank 2500 Paid for repairs to machinery 100 * 13] Bought goods of Jacob Bios. Lid | v0 * | Paid carriagn on these goods 0 + 46 | Recewed cheque irom Narain Bros ; and the cheque deposited bank | 950 Discount allowed to themn . 50 + 17 | Paid cheque to Jacob Bros Lit 1,000 + 4| Bank intimates that cheque of Narain Bros has been vetumed unpre + 19 | Sold goods for Cash to Kay Bros . | 6 . + 21 | Cast deposited in bank 00 + 26 Paid Hdunicipal Taxes in cast 100 +95 | Borrowed from Urania tnvastment Co. Lid for erecting own premistss ‘Money deposited with bank for the time-being 10,000 * 26 Old newspapers sokd . 20 * 26 | Paid for advertisements 100 31 | Paid rent by cheque: 150 Paid sananes tor the month 300 ‘Drew out of bank for private use 250 insolvent, a dividend of 50 P. inthe rupee is recelved Dew Beant Vanehkee Waralionr Gr Pinel Necenet QL the totiowing inthe Til Halace of Mie Rasta Agnes m0 Nt cha. Prepare Tating roc ad Loss Aesount fr the year ered Mat Mae Balance Sheet vo tha date Rs 19,000 15.000 15,000 1500 25.000 Burniture & Fittings Motor Van Loan form Hari @ 12% Interest Interest pat on above Sales Purchases Opening Stoo Establishment Expenses Wages Insurance Commission received 13.000 900, 10n.060 px) ()) Outstanding Adjustments (a) The valve of stock on 313-2509 was Rs wae Re San" CF Prepaid Insurance Rs, 300, (4) Commision reserve 4m atvanee AB 1,300 (6) Allow interest on capital @ 10K.) Depreciate bulding ahs, Furnitare 2 Fitngs 10%, Motor Van 10%, () Charge inert on drawings Rs. 00) (A) Recret Hees 900. GP ACUI, NeP= 6SIS, BIS 2 Ag+ From the following Trial Balance prepared from the books of Laxmi areca can sine 012 peepace Trading and Profit and Loss Account ands Balance ‘Sheet - be c Re. Rs {Laxmi Narain’s Capital and Drawings 10,550 119,400 Bills Receivable 9,500, ‘Purchases and Sales 2,56,590 3.36430 [Returns Inward 2,780 Stock on Ist July ett 89.680 Commission soto Plant and Machinery 24.400 Salaries 11,000 ‘Travelling Expenses ano. Debtors (including Mohan for dishomoured cheqQe Rs. 1,000) 62,000 Stationery 2,000 Telephone Charges 1.370 Interest and Discount 5,870 ad Debis 3.620 Fixtures and Fitings 4970 Croslitors : 59.630 6% Loan 20.000, Wages 40970, Cash in hand $30, Cash at Book 14970 Insurance (including premium of Rs, 300 per anni paid upto 31st December S02, 400 Rent and Taxes 5,620 3.61,100 5.61, 100 Stock on ade on 30th June, 2012.was Rs. 128,960 Wate off half of Mohan's cheque, Create Provision of 5 per ceat on Debra Manufacturing wages, include Ra 1200 for exection ul new machinery purchased last year: Depweciate Plant at Machinery by 5 pet cent and Fixture and Fithngs by 10 pet cent per anewan, Commission accrued Bes 600 Tnerest on Hoan forthe last two maaths 1s Wot pasd ty PS 96510, N Po 60028 , Pfy= 253-408 The following is the Trial Balance of Ram Lal on March 31,2009 : Y G2 Rs. . Rs. i Debit Batances : 7,500 Bills Receivable an 8 Bonk mn * 34,96,000. Stock 3,06,290,,, 3 Purchases (Adjusted) 21,000 Gist March 2999) ? a ai Bated 2,500 Credit Balances : ? “arriage 2,000 Capital 2,00,000 : Carriage on Purchases 1,500 Bills Payable 50,000 Lighting 1,35,000 Loan 1,00,000 PeeanTees 2,000 Sales 36,00,000 Sundry Debtors 40,000 Discount 2,000 pia 30,000 Commission 500 Cash in hand 1,250 Sundry Creditors 1,00,000 mn Prepaid to the extent of Rs. 600. During the year, bad debts amounted 19 Rs 25004 provision @ 5% eco be made on debtors. Buildings have to be depreciated at 2% and Famitutes at 10%. Prepare Trading and Profit and Lae Movs? and Balance Sheet as on 31st March,009. (4#= 1)2.000 5 “Pe 62025, Bk: SiRor5 "The following Trial Balance was extracted from the books of Shri V. Balkrishan as on 31st March,2009 : Debit Balances Rs. Opening Stock 34,200 Plant and Machinery 20,000 Motor Car 12,000 Manufacturing Wages 34,500 Purchases 1,02,000 Salaries 15,850. Sales Returns 3,100 Fumiture 10,000 Bad Debts 1,400@@ Freight on Purchases 1,860 Interest and Bank Charges 400 Freight on Sales 2,140 Cash at Bank 4,200 Buildings 24,000 . Cash in hand 1,120 Manufacturing Experises 9,500 Credit Balances Insurance and Tax 4,250 Capital Account 80,000 / Goodwill 25,000 Sundry Creditors 44,560 General Expenses 8,200 Bank Loan 0 15,000 Factory Fuel and Power “1,280. Purchases Retums 1,740 Sundry Debtors 78,200 Sales 2,50,850 Prraciocy Lighting 950. Provision for Bad Debtors 2,000 tnerbate Trading and Profit and Loss Account forthe year ended 31 December. 9.009 and the Balance Sheet as on that date taking into considersion de following information: Plant and Machinezy by 7 Provision for > 1 Debis (65% on Su Profit is to be provided BrDO, NPecsay] - The following balances were taken from the books of Shri Prasad B)con G1410- “ on 31st March,2009 : Rs. Rs. ital 1,00,000 Rent (Cr.) 2,100 Dein 17,600 Railway freight and other Purchases 80,000 expenses on goods sold 16,940 Sales 1,40,370 Carriage Inwards 2,310 Purchases Returns 2,820 Office Expenses 1,340 Opening Stock 11,460 Printing and Stationery 660 Bad Debts 1,400 Postage & Telegrams 820 Bad Debts Provision Sundry Debtors s2070 (ist April, 1998) 3.240 Sundry Creditors 18.93 Rates and Insurance 1300 Cash at Bask : ‘2,400 is 1 in . bie Ree tte 1,240 Office Furniture 3,500 ee hea 4,240 Salaries and Commission 9,870 Sates Returns 6,280 Additions to Buildings 7,000 i 25,000 aged Trading and Profit and Loss Account and Balance Sheet as on 31st March, Prepare jing in view the following adjustments : 2009, after keep ee Buildings at 24% and new additions to Buildings at 2% and a i ts i re Ne Roar to 6% of Debtor, (0) @ Pee oa Gaptat af 5%. (7) On Stat Mereh, 10DB. ble Rs. 200. rT " 40, Rent Receival (8) Unexpired Insurance Rs. 2 . © stocks vee aR Pe 3190 WM pelodbO » Bj 122450 : Cr ‘3 ¥ _ ~ - a + 2 ——— a Voluoke CR annals COop . Accqruttivg ) ZL r on 5 2000, X a firm purchased second-and machisery for Rs. 200%) and pert is 24A1 on * Be nin firm ow OHO, the Fim purchased machinery worth Rs. 12,000. On 3-6-2099, ‘eecenaliinlng i ged 1-20 as sold for Rs, 6000, On 1700 fe sirrnachinery wre buschaecd on machinery pure Ment For the machinery was to be mBde as FoloWs : a instatrnent bat, ps at rn ° ae 17201 500 US 3062012 eo —wes Lo? 306-2013 ES ; © 1,000 and Rs~$00 respectively. Payments in 2012 and 2013 include interest of ‘The accounts are closed every year on 31 March. “The firm writes off depreciation @ 10 ps. on original coz. Shaw the Machinery Account for three years ending on 31-3-2012._ GD2=— Afi writes off 95% ofthe cost of the machinery acquired over a period of 10 years by the 2 gir Tie method Full depreciation is written off even ifthe machinery sin use for the part of year, On Frage ti sor 2010, the original cost of the machinery in use is as follows : Purchased in 2001 or earlier Rs. 57,000 Purchased in 2003 Rs. 130,000 Purchased in 2006 ‘ Rs. 40.000 hhine which had cost Rs. 10,000 in 1996 was disposed of for Rs. 900 and on 30th ene eres t x machinery installed in 2006 at a cost of Rs. 20000 was destroyed in on accident and Be iT a00 was reccived from the insurers insettlement of the'claim, On the same date, s new machine costing Rs, 25000 was invalled. Show the relevant accounts for the year 2011 under the Following options : i Only Machinery account is made ; ié Machinery account and accumulated depreciation account is made ; ¥ il Machinery account and machinery disposal account is made; and X jn, Machinery account, aecumulated depreciation account and machinety dispoeal account is made. ‘A company’s plant account at 31st December, 2010 and the corresponding depreciation Clown by year of purchase are as lows provision account, broken ‘Year of Purchase Cost of Plant Depreciation Provision _ 1994 20,000 20,000 2000 30,000 30,000 2001 1,00,000 93,000 2002 70,000 59,500 2009 50,000 7,500 2010 30,000 1,500 3,00,000 ~2.15,500 Depreciation is at the rate of 10% per anaum on cost. It is the Company's policy to assume that all purchases, salns or disposstof plant occurred on 30th Junein the relevantyear for the purpose of calculating depreciation, irrespeetive of the precise date on which these events occurred. During 201 the following transactions took place : 1. Purchase of plant amounted t Rs. 150,000 : 2. Plant that had been bought in 2000 for Rs. 17,000 was scrapped. 3, Plant that had been bought jn 2001 For:Rs. 9,000 was sold For’500, 4. Plant that had been bought in 2002 for Rs. 24,000 was sold for Rs. 1, +» You are required to prepare for.20]1 : ‘© plant account; : © piovision for depreciation account; and © disposal of plant account, " Also show the breakdown of balances by year of purchase. es LL | 20n1-42008, Moon Ltd. purchased a plant for Rs. 1000000. On 1-10-2008, an additional plant wis purchaded costing Bs. 5,00,000. On 1-10-2008, plant purchased on 1-4-2008 was sold off for Rs. 4,00,000. On 1-10.2010 a new plant was purchased for Rs. 12,00,000 and the plant purchased .on 1-10-2008 was sold for Rs. 420,000 on thesame date. Depreciation is to be provided at 10% per annum on the written down value on 31st March every year. = Prepare tife plant account for three years ended 31-3-2011. 2A atic it is Re 40000 and Aran eaten sepvedaton @ BOM fecten ow els: Mactinery costing Rs. 1,060,000, rachinery. yurchaset }-1-2000, 1-7-2001 aid 1-1 , respectively. 5 eae Purchased on 1-7-2001 was damaged and replaced-by a new machine Fe las ke 0000. The aged machinery was insured and an is A ry costing Rs. $0,600. The admitted by the lnsuran and an insurance claim of Rs. 24,800 (after adjustment of value of scrap) was ce company. The scrap. was sold for Rs. 2,200. : Show Machi pes chinery Account, Accumulated Depreciation Account and Machinery Disposal Account for the v2 nd a be pas Fee te ce appeared in machiry aceountonI:1-2003 v ° 7, Overhauling and erection chat Tra purchased machines fOr Rs. 120000 and 1. punches Dsoth Sue, 2003, one of the Rs 2 tie cold asa scrap for Re SoS tion is to be provided @ 15% oe Hon ie iat tree year The ot Sete on Panymenthe sreverd year Tey Yer 2004, Moon Lid purchaséel 8 PANE Tot OS 1000,000. On i, ebooks ia pen was purchased costing Re Efe n.d Ist October, 2005 the plant ptchasc gga et 28 ae gold clf for Rs. 4,00.000.0n 1st ‘October, 2006, a new plant wes ‘purchased for Rs. 12,09,gt°*AbT, 2005, eat ig Hat October, 2004 was Sold for Rs. 420,000 on the and the pat, ues tobe providedat 10% per ancumanthe oot" ‘down value on31st March eve Der ctor tare years ened Hat March, 290% “Vy Prepace Change of Method of Depreciation with Immediate Effect = . eens purchased on Ist January, 2000certain machine for Rs. 1.94000 and spent PE om et bly, 2000 addtional machinery costing Re. 100° We purchased. On Ist har ena eiechiney purchased on Ist January, 2000 having become Re ote, was auctioned for Ra, 1,00,000 anden te Se reaver at x cost of Re. 150.000, Depreciation was Provide for ‘annul oy chinery Wit By per annum on the original cost of the machinery! No ceprecaion need be dist Deseacva machinery ssolor auctioned frtkat past of iis yearia which thesale or auction espace _ Brevi eprecation shal be provided one bass Ip 200) AOE ‘changed thie meted of siding deprecation and adopted the method of writing naeE 15% per annum on the written down value 2 athe machinery account for the calendar years 2000 to 2003, Change of Method of Depreciation with Retrospectve Effect = GFE ~ _zGreen Channel Co, purchased a seco irges amounted to Rs. 49,000. paother machine was purchased for Rs. 80,000 on Ist July, 2000. On Ist July, 2002, the machine installed on {st January, 2000 was sold for Rs, 1,00,000.On the samedate another oechine was purchased For Rs, 3,000 and was installed on 30¢h ‘September, 2002. Under the existing practice the company provides depreciation @ 1086-20 ‘original cost. However, from the inrve depreciation @ 156 pa. This change wastobe made ‘year 2003, it decided to adopt WDV method and to with ret ive effect SS . Prepare Machinery Account in the book of Green Channel Co. from the years 2000 to 2003. [5 » FABC Ltd. purchased on 1st Jan, 2008 second hand plant for Rs, 30,000 and immediately spent wal machinery of a cost of Bs. 25,000 was purchased. On Rs_20,000 in overfhauling it. On Ist July, 2008 addition: + ited on Pat Tain, 2008 became obsolete and was old for Rs. 10,000-n that date Ist July 2020, the plant pur new machinery was purchased at a-cost of Rs 60,000, Depreciation was provided at 10% 2.on thegsizinaleostof the ‘asset.In 2011 thecompany changedthis method. ol providing depreciation to 15% pa. with retrospective effect. ‘Show Plant and Machinery A/e and pi ision for Depreciation Ase for the years 2008-2011. 4 wn AN" sMayut Traders, which depreciatsits machinery at JO Peto per according to Diminishing ~ Ffance method, had on 1-1-2008 Rs. 4,86,000 balance in ‘Machinery Account Part of the machinery; ed ‘on 1-1-2007 for 60,000 was sold For: 000.00 tst July, 2009 and anew machinery at ‘a cost of Rs. 70,000 was purchased and installed on thy hharges being Rs. 5000. Mayur Teaders want TSF method of depreciation on 1-1-2009 from, Diminishing bak riod hon with effect. fror 1-1-2007, The rate of depreciation remains the same.as before. the year 2008, Alo show your working clearly, » Machinery account, 10% ‘Show Machinery Account for ince of Rs. 405.000 on Ist January, 2003 in its voc. On Ist Jily, 2003, the company-sold \oe* FAcompanyhada bal Qeu0 depreciation was charged byrdiminishing balande meth a Part of machinery for Rs. 87,500; which was at January, 2001 for Rs. 1,20,000 as a part of become’ useless; and on the ie, on ist July, 2003, the company purchased & new machine for Rs-2,50,000. On 3 1stD 003; the Directors ofthe company decide toad ced instalinent method of depreciation from Ist Jant instead of diminishing balance method. The rate of depreciation will - remain the same. = : repare Machinery aecountoa the books of company for the yeak ending 2003. Be, * A company purchased “rent to which Rs..60,000 and Rs, 40,000 were spent on its repairs July, 2001 ancther machinery was purchased for Rs. 260,000. On Ist July, beccme outdated was auctioned for Rs, 3,00,000 and on the same date, another machinery was Rs. 2,50,000. On Ist July, 2003, the second machinery was also sold off apd it fetched Rs. 2,30,000. Depreciation was provided on machinery @ 108 on the original cost annually on 31st December, under the pee talent method. From 1st January, 2002, the method ‘of providing depreciation was changed (9 Reducing Balance method, the rete being 15% p2. lowing accounts in the books of the company : You are required to prepare the fol (@ Machinery Account for the years ending: 2000 to 2003. (i) Machinery Disposal Account. Note:The Heures are rounded off ta the nearest muttinle nf Runees ten ndchand machine on st January, 2000 for Rs. 1,60,000, second hand machinery on ist January, 2000 for Rs. 3,00,000, and installation, réspectively. On Ist 2002, the first machinery having ased For or FFs machine on 1-1-2008. Depreciation has been charged for the years GNX A Tormpany purchase : . GM. Fa company purch hod! on opening balance of each tem of Plant and Machinery 95 2008102011 Oo ed de mount at the end of 34st December, 2011 was Rs, $4,000. There in uf. The balance ot ne years, purchases were Rs. 16800 in September 2008 ‘and Rs. 11,400 in December ng sales during these years, Pia should be charged @ 20% onthe same method but calculated ran su ioeeiin te es acne sy ve revised basis at the end of 201 et to the rove tharging depreciation on ts plant and machinery onthe Straight Line Method at ine So Pre ordecided in 20H to change the method of providing depreciation to lerten Down Value ‘coping the ecto O% wees. 2006. The following information was available from 2008 20072008 «20092010 = Plant and Machinery purchased (at cost) 180,000 $0000 soa — 250,000 Plant and Machinery sold at - 001 200 - — — 5.000 8,000 Cost price as purchased in 1996 gn = Depreciation charged to profit and loss account 18000. 21,500 26,700 26,700 51,700 DenSetion ie not charged on the assets sold during the year. You are required to prepare the Plant and Machinery Acconnt from 1996 to 2001. : ‘Ram Ltd, which depreciates its machinery at 10% pon Diminishing Balance Method, had on “st sanuary, 2011 Rs. 9,72,000 on the debit side of Machinery Account. x During thevear 2011, machinery purchased on Ist January, 2009 for Rs. 80,000 was sold for Rs. 45,000 0n Ist July, S011 and a new machioery at a cost of Rs. 150/000 was purchased and installed installation charges being Rs. 8,000. = The company wanted ro change the method of deprecation fram iin *: Method with effect from Ist January, 2009. Difference of depreciation upto Bist December, 2011 is to be adjusted. The rate of depreciation remains the same as before. ‘Show Machinery Account For the year 2011, ab M/s. SS. Traders commenced business on 1st January, 2005, when they purchased machinery Rs. 7,00,000. They adopted a policy of (i) charging depreciation at 15% pa on diminishing balance basis, and (i charging full year's depreciation on additions made during the year. Over the years, the purchases of machinery have been : ° 18.2006 1.50000 '30-9.2008 2,00,000 On Ist January, 2008, it was decided to change the method of depreciation and rate of depreciation to 10% on stcaight line basis wich retrospective effect from 1-1-2005, the adjustment being made in the accounts for the year ending 31st December, 2008, Prepare Machinery Account and Provision for Depreciation Account for the year 2008. f a "ABC Ltd. purchased on Ist October, 2004, a machine: : : Lid. ' ry for Rs. 4,50,000 and spent Rs. 10,000 treight and transit insurance. On 25th December, 2004, it Furth: its erection ‘machinery was putto use-on[-2005.On Ist July-2008 i purchased another m shinerytos es LOOSOO Bick is year 2006, it spent Rs, 10,000 for repairs on 1-4-2006. lowever, on 1-4-2007, a part of the machinery, purchased on 1-10-2004, 1.50000. On 1-10-2007 it purchased another machinery for Re. 300000, 2 700000 was sd for Re On Ist July, 2008, however, machinery purchased on Ist July, 2005 rect J a , cl Sati gharecd by the fem @ {ompa by Nelsendovia value: tmethed. During the ao eee method of providing depreciation and adopted the straight line method fai __ meray goers ad dered he sgt ne eed chang erection @ Oey EXCHANGE OF USED ASSET, WITH A’ ASSET . ON *aqushka Company Private Ltd. purchased a Maruti 860 for Rs.2,00,000 on 1-1-2010. The ear fs expectea ww run For 10 years after which its estimated scrap value is Rs. 10,000. On 30-6-2011, the company _ ‘exchanged the Maruti 800)car with a’ Maruti Zen car from Vikas Automobiles Ltd: The list price of new Zen is"; Rs, 350,000 anid value of the old car agreed by both parties was Rs. 1,75,000. Prepare the relevant accounts in the books of the company. ok a ‘A, who’closes his books on 30th June every year, operates his factory with two machines Purchased from B, under an arrangement, by which at the end of three years, B allows him: 20% of the cost price as anexchange for the new model. . ied A provides depreciation @ 30% pa. of origiral cost for each of the first two years and 20%p.a. forthe third year The following payments to B have been recorded since : urchased another machinery for Rs, 1,00,000. During A commenced business on Ist July, 1991: Rs. On. 2008 Purchase of Machine A : 2,000 2009 Purchase of Machine 8 . * 3,000 306.2011 On purchase of Machine 3,600 C in-exchange for Machine A On31-12-2011, A purchased from B anew model (machine D) which would do the work of two machines. The ‘cost was Rs. 5,000 and B allowed Rs. 3,000 for Machine B and C in part exchange. Youare required toprepore Machine Account For four yeas upto 31-12-2011 inthe books of A, open a separate cceuntfor Depreciation Provision showing the balances of these accounts carried down as on 20th Tune every Tandon Ist Naramber 211 Alsn nrenare Machina Disnasal Account clearly differentiating between eae A See AD Depreciation (3 (0 Be provide 6 ry : Sees J chow machinery account for the st for Re. ¥000000, aswel = plat r Tape 2004, Moo Ltd Eonfom On Ist October. 2005, the plant por fs, a pew plant was peach Poel plant ocd canting BS career a tat Getter seat et purchased 08 ed for Re 4.204 epedesstiin ito mex the written down vaboe oo 3431 March every ecount ft March, 2007 ree Chatige of Atethoet iA pucchasod on Ist January, X * 7000 additional ind Rs. 1,00,000 was purchased. On temas ttioned Yor Re. LOS aan oe Aer smal same day new on tikes place Mat December at the provided when s machinery is wold ora calendar years fon with Retrospective Bifect + ong semen an arc sea meen ne Fooa farsa taboh ‘Another machine was purchased for Rs 80000 on nt July, 2000, On isi July, 20 he machine wavialled on {um Fanuary, 2000 was sold for Rs. 1,00,000.On the sarmedate anoth awed for Ri 10,000 and w: tallied on 30th ‘Sepeember, 2002 — fachine wan provides depreciation @ depreciation & 15% pa: This chi obe made Change of Method of Depreciat year 2003, it decided to adopt WDY met with retroapective effe Prepare Machinery Account [ABC Lael purch T2068 second hand plast for Rs fhacding On Ist S civaredunery of scowl Ra. 2 in duly : ‘kine obsolete aesl was sald For oew machinery was porrchased at a comt of i 00,000. eda [pa ci teumgnatcorted the asset, In 2011 the company chan 10 [SR pa W.DLY. wh reospective effet Shanahan Suis Foe Dcperstation Ac for the years 2008-2011 ving ta Dirinii ry at 10 percent pa. accord of the machinery purchase: Co, (com the years 2000 to 2003. SOHO and inimediately spent DOO was purchu 10,000 Os that este Depreciation was provid al providing depreciation, Show Plant and Machinery A/c a Oi ~ | Mayu Traders, which depreciates its m i Ghance method, had on 1-1-2009 Rs. 4,86,000 balance ‘ry Account Patt 0 pn 1-1-2007 fos was sold for Rs. 40,000.00 Ist July newmechinery at a cont of Bx. 70,00) allel on the 33 alistion charges being Rs. 51000. from Diminishing balance method to was purchased Mayur Traders Tockanse of depreciation oni 1-1-2009 Se tdine evcihed swithuelcet Egor 1>1-2007. The rate of depreciation ‘Show Machinery Account for the year 2008, Abobo JSF working clearly. v y OW=-1 __ :Acompanyhada banes nf Ra 805,000 on Ist Jamubry, 2003 nits Machinery account 8 (er annum depreciition was charged by diminishing balance method On Ist July, 2003, the company soda Fart of machinery for Rs. 87,500, whiclt S purchased on Ist January, 200} for Rs. 120.000 = 7 of it Pa esc yatless, and att the jamie date ie, on tet July, 20 the company purchased a new machine fee ee 2.501000. On 3st December, 2003, the Directors of the company decideto xed inctatinent method ‘of depreciation froc 1st January, 2001 intesd of danishing balance method. The cate of depreciation will fae Machinery aecount on the books of eompary For the yoar ending 2003. 13.' "2A company purchased secood hand machinery 2000 A GER ows wish Ba COO and Rs. 40900 were spent on iis Oe ee maualaion, me on July, 2001 another machinery was purchased for Rs. 2,60,000, On ist July, 2002, the first machinery having become outdated was auctioned far Rs. 3,00,000 znd on the same date, soother machinery was purchased for Rs. 2,50,000. On [st July, 2003, the second machinery was also sold off ap it fetched Rs 230,000. Depreciation was provided om machinery @ IC original cost annitally on 31st Decoriber, under the Fixed Instalment method. From Ist January. 2002, the method of providing depreciation was enged. 19 Reducing Balance method, the rate being 13% pa ‘You ate required to prepare the following accounts in the books of the company : {9 Machinery Account for the years ending 2000 to 2003, . . (i) Machinery Disposal Account. Note:The figures are rounded off to the nearest multinde of Buenas ten remains the same as befoce, a a on rece Fa perp rth eae Oe on : any ache Sw metho! of opening Balance ofeach tem af Plant anct Machine”) 2201 eo aren) Acconunt mt the nd of 3t8t Docetar. 200! was Rs 54.000, There ‘mde, Tht balanes Aertpaoa were Ra 1600bin September 2008 and he. 11.400 in December eke noses dering hese Yea, Pt pecaton shou be charged @ 70% 00 the snc scthodt but cleuiied 10 Thermanagemen dense op et iflect from 2008. You are required to pass Journal Entry a at ye end of 201. - Ta ae maine depreciation on ks plant aed machinery on the Straight Line Methos! at a EE tirector deetiedia 701 | tochange the tether of providing depiecation ie ae Ths reat LOm weed, 2006. The Follancing information es mvs rom 00s) = 2007, S200 aN . 180,000 © 40,000 60,000 — 250,000 — 4000 1,300 _ - Plant anid Machinery sold at =) ae ed Cost price as purchased in 1996 . — - Coto ete eott eed os account 18000 24500 240026700 S.7n perctation ls not changed on the asiets sald during the year. You are required to prepare he Plant ancl Mchinery Account from 1996 to 2001. : ; Qe Ram Lid whichleprecates its machingry al 10% pa. om Dirminishing Balance Method, had on . 972, the debit side sunt. 3 Pura year 2011 chine Tanuary, 2009 (or Rs. 80,000 was sold for Rs. [During the year 201 1, machinery purchased on Ist Jue BOI dod a now machinery at a cot of Rs. 1;50000 was purchased and installed on tbe sameais, installation charges being Rs. $000. “The company waited to change the method of depreciation from Method with effect from lat Ianuary. 2009, Difference of deprociatsons adjusted, The rate of depreciation remains the same at before Show Machinery Account for the year 2011 on M/s.S.S. Traders commenced business on Ini January, 2005, when they purchased machinery fi 7,00,000. They adopted a policy of {) charging deprecianan at 15% pa. on diminishing balance basis, and (i)-chorging Fall year's depreciation on additions made during the year. Over the years, the purchases of ts to be ‘upto 31st December, 201 machinery have been : 12006 190,000 409.2008 2,00,000 On Het January, 2008, 1 was decided ta change the method af depreciation and rate of depreciation to 10% on straight line basts with retrospective effect [rom 1-1-2005, the adjustment being made in the accounts for the year ending 31st December, 2008. grrr Account and Provision for Depreciation Account for the year 2008. | Ee J ABC Lid. purchased on Ist October. 2004, chinery for Ra. 4,50,000 Height aoe (rast insurance On 25th Deventer, 2004 it further Met he aes Se ee ‘ wachiaery was put to uze-on 1-1-2008, On Ist July 2605 ty During the year 2006 It seat Rs. TQQDD for repairs on 1 3008 other Machine For Rs, 100.000 However, on 1-4-2007, a part of the machinery, purchased 60 1-10-2004, c 1.50000 Gu 1-10-2007 K purchased another machinery for Rs, Zinogon, 7s Rs 200.000 was eo for Re ‘On Ist July, 2008, however, machinery purchased ‘ charged he firma) 10% pa by wrdtion down value extol Dering te sone see A epee the method of provid . year2008, ABC Lid, decided tachange providing depreciation and adopted the straight line method of charging depreciation @ 10% Prepare Machinery Account as per the prowiions of AS-6 upto the year endiag 31-12-2008," eter EXCHANGE OF USED ASSET WITH A NEW ASSET . du « Agushka Company Private Lid. purchased » Maruti 800 for Rs. 2,00.000-0n 1-1-2010. The ear inexpeetea iw run for 10 years after which its estimated seeap value is Rs. 10,000. On 30-6-201 1, the company ‘exchanged the Maruti 800-

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