depreciation, questions for class 12, straight line method.

straight line method question for class 12

QUES:1 on 1st april, 2010, shri Ram purchased a machinery costing Rs, 40,000 and spent Rs, 5,000 on its erection, the estimated effective life of the machinery is 10 years with a scrap value of Rs, 5,000 calculate. the depreciation on the straight line method and show the machinery account of first three years, accounting year ends on 31st march every year,

Ans:[balance of machinery A/c-33,000]

QUES:2 on 1st january, 2005 a merchant purchased a furniture costing Rs, 55,000 it is estimated that its life 10 years at the end of which it will be sold for Rs,5,000. Additions are made on 1st january, 2006 and 1st july, 2008 to the value of Rs, 9,500 and Rs, 8,400(Residual values Rs, 500 and Rs, 400 respectively).show the furniture account for the first four years, if depreciation is written off according to the straight line method .

Ans;[balance of furniture A/c on 31st december, 2008–Rs 49,800]

QUES:3 on 1st january, 2006 A ltd, purchased a machine for Rs, 2,40,000 and spent Rs, 10,000 on its erection. on 1st july, 2006 an additional machinery costing Rs, 1,00,000 was purchased . on 1st july 2008, the machine purchased on 1st january 2006 was sold for Rs, 1,43,00 and on the same date a new machine was purchased at a cost of Rs, 2,00,000. show the machinery account for the four calender year after charging depreciation at 5% by the straight ;line method

Ans:[loss on sale of machine -Rs, 75,750, balance of machinery A/c -Rs, 2,82,500]

QUES:4 from the following transactions of a concern, prepare the machinery account for the year ended 31st december, 2010

1st january: purchased a second hand machinery for Rs, 40,000

1st january: spent Rs, 10,000 on repairs for making it serviceable

30th june: purchased additional new machinery Rs, 20,000

30th september: Repairs and renewals of machinery Rs, 3,000

31th december: depreciate the machinery at 10% p.a

[balance of machinery A/c –Rs, 64.000]

QUES:5 an asset purchased for Rs, 10,500 on 1st april, 1999. the scrap value was estimated to be Rs,500 at the end of asset’s 10 years life, SLM of depreciation was used. the accounting year ends on 31th march . the asset was sold for Rs, 600 on 31st march, 2006 calculate the following

(a) the depreciation expenses for the year ended 31th march, 2000

(b) the net book value of the asset on 31st march, 2004

(c) the gain or loss on sale of the asset on 31th march, 2006

Ans:[loss on sale of machinery–Rs, 5,250, on 1st jan, 2006: balance in machinery I(2/3)-Rs, 14,500 machinery II-Rs15,500 & machinery III-Rs, 8,500]

QUES:6 on 1st january, 2004 machinery was purchased by X for Rs 50,000 on,. 1st july, 2005 additions were made to the extent of Rs, 10,000. on 1st april, 2006, further additions were made to the extent of Rs, 6,400 on 30th june , 2007 machinery the original value of which was Rs, 8,000 on 1st january, 2004 was sold for Rs, 6,000 depreciation is charged at 10% p.a on the original cost. show the machinery account for the years from 2004 to 2007 in the books of X . x close the books on 31st december,

ANS: [profit on sale of machinery -Rs, 800, balance of machinery A/c (31.12.07)-Rs 37,980]

QUES:7 the following balance appear in the books of X ltd . as on 1st april, 2001

machinery account —Rs, 5,00,000

provision for dep: Rs, 2,25,000

the machinery is depreciated at 10% p.a on the fixed instalment method. the accounting years being april-march on 1st october, 2001 a machinery which was purchased on 1st july, 1998 for Rs, 1,00,000 was sold for Rs, 42,000 and on the same date new machine was purchased for Rs, 2,00,000, prepare the machinery account and provision for depreciation A/c for the year 2001-2002

Ans;[loss on, sale of machinery -Rs, 25,500; balance of provision for depreciation A/c Rs, 2,47,500: balance of machinery A/c -Rs, 6,00,00]

QUES:8 following balances appears in the books of Rama bros; Rs

1st january, 2007 machinery A/c 80,000

provision for depreciation A/c 36,000

on 1st january , 2007 they decide to sell a machine for Rs, 8,700 this machine was purchased for Rs, 16,000 in january, 2003 you are required to prepare the provision for depreciation account and machinery account on 31st december, 2007, assuming the firm has been charging depreciation at 10% p.a on straight line method.

ANS: [ loss on sale of machinery -Rs, 900: balance of provision for depreciation A/c -Rs, 36,000: balance of machinery A/c -Rs, 64,000]