DEPRECIATION QUESTION WITH ANSWER QUESTION NO. 38

OMTEX CLASSES



38.  On 1st April, 2004 Saikripa enterprises purchased two computers of Rs. 40,000 each. On 1st October, 2004 they purchased one more computer for Rs. 40,000. On 1st October, 2006 they sold one computer, which was purchased on 1st April, 2004 for Rs. 18,780. Depreciation on computers was provided @ 10% p.a. on diminishing balance method and the financial year closes on 31st March every year. Prepare computer A/c depreciation A/c for years 2004 – 05, 2005 – 06 and 2006 – 07. (September. 2008) [W.D.V.]

WORKING NOTE : CALCULATION OF DEPRECIATION
Date
Machinery
Machinery 2
Machinery 3
Total depreciation
1.4.04
40000
40000


1.10.04


40000

Depreciation @10%
4000
4000
2000
10000
1.4.05
36000
36000
38000

Depreciation @10%
3600
3600
3800
11000
1.4.06
32400
32400
34200

Depreciation @10%
1620


1620
30.9.06/1.10.06
30780



SOLD
18780




12000
Loss



Depreciation @10%

3240
3420
6660
1.4.07

9160
30780


DATE
PARTICULARS
AMOUNT
DATE
PARTICULARS
AMOUNT
1.4.04
To cash / bank account
40000
31.3.05
By depreciation account
10000
1.4.04
To cash / bank account
40000



1.10.04
To cash / bank account
40000
31.3.05
By balance c/d
110000


120000


120000
1.4.05
To balance b/d
110000
31.3.06
By depreciation account
11000



31.3.06
By balance c/d
99000


110000


110000
1.4.06
To balance b/d
99000
1.10.06
By depreciation account
1620



1.10.06
By cash/bank account
18780



1.10.06
By profit / loss account
12000



31.3.07
By depreciation account
6660



31.3.07
By balance c/d
59940


99000


99000
1.4.07
To balance b/d
59940