6 Marks Question

Question 16 Marks

A firm purchased on 1st April 2015 certain machinery for Rs. $5,82,000$ and spent Rs. 18,000 on its installation. On 1st October 2015, additional machinery costing Rs. $2,00,000$ was purchased. On 1st October 2017, the machinery purchased on 1st April 2015 was auctioned for Rs.2,86,000 plus CGST and SGST @ $6 \%$ each and new machinery for Rs. $4,00,000$, plus IGST @ $12 \%$ was purchased on the same date. Depreciation was provided annually on 31st March at the rate of $10 \%$ on the Written Down Value Method. Prepare the Machinery Account for the three years ended 31st March 2018.

Answer

Depreciation is calculated by Diminishing value method so it is calculated on balance value of an asset or written down value of asset not on the cost of the asset. GST paid on purchase of asset increase the cost of the asset.

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Question 26 Marks

Sumit Bros, purchased a plant on $1^{\text {st }}$ April, 2021 for ₹ 7,00,000. Depreciation is charged @ $10 \%$ p.a. on the original cost. On $1^{\text {st }}$ January, 2023, the plant was found unsuitable and sold for ₹ $4,20,000$. Prepare the Plant Account, Depreciation Account and Plant Disposal Account if depreciation is charged to Plant Account. The accounts are closed on $31^{\text {st }}$ March every year.

Answer

Working Notes:
i. In the second year, depreciation will be charged for the nine months because the machinery is sold on $1^{\text {st }}$ January, 2023, i.e., before closing the books on $31^{\text {st }}$ March, 2023.
ii. Second year depreciation and loss on sale of plant will be transferred to Profit \& Loss Account on $31^{\text {st }}$ March, 2023.
iii. Book value of plant on the date of sale is transferred to Plant Disposal Account since depreciation is charged to Plant Account.

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Question 36 Marks

Rectify the following errors:
i. Sold old furniture of A for $₹ 11,500$ was passed through the Sales Book.
ii. Credit purchases of $₹ 12,000$ from Ashely omitted to be recorded in the books.
iii. Repair made were debited to Building Account ₹ 7,000 .
iv. Credit Sale of ₹ 1,800 to Anshika was recorded as ₹ 8,100 .
v. ₹ 6,000 paid for office furniture was debited to the office expense account.
vi. A credit sale of goods $₹ 15,000$ to Rajesh has been wrongly passed through the Purchases Book.

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Question 46 Marks

Pass Journal Entries to rectify the following errors:
These errors are located after the preparation of Trial Balance.
i. ₹ 17,000 paid in cash for purchase of a Typewriter was charged to office expenses account.
ii. Credit sale to Abhishek ₹ 5,000 were posted to the Credit of his account.
iii. Cash sales ₹ 20,000 were posted to commission received Account ₹ 200 .
iv. Wages Paid for the construction of office ₹ 9,090 were debited to building Account.
v. Salary payable to Amar ₹ 12,000 was not recorded in the books.

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Question 56 Marks

Pass Journal entries for the following adjustment on $31^{\text {st }}$ March, 2023:
i. Interest due but not received ₹ 10,000 .
ii. Salaries due to staff ₹ 50,000 .
iii. Out of the rent paid this year, ₹ 5,000 is for the next year.
iv. Provide $10 \%$ depreciation on Furniture costing ₹ 1,00,000
v. Goods used in making Furniture (Sales Price ₹ 5,000 ; Cost ₹ 4,000 ).
vi. Received commission of ₹ 20,000 by cheque, half of which is in advance.
vii. Allow interest on capital ₹ 8,000
viii. Charge interest on drawings ₹ 1,500.

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Question 66 Marks

Journalise the following transactions:

2023
April 1	Received an order for goods for ₹ 1,20,000 from M/s Ram & Sons.
April 3	Received order for goods from M/s Shekhar & Co. of ₹ 5,00,000 along with a cheque for ₹ 1,80,000 as advance.
April 5	Placed order for goods with M/s Gupta & Sons of ₹ 2,50,000; paid them ₹ 1,00,000 by cheque in advance.
April 7	Gupta & Sons supplied goods of ₹ 2,50,000.
April 10	Paid a cheque for 60% of the balance amount due to Gupta & Sons on the account.
April 15	Goods for ₹ 20,000 and furniture of the book value of 10,000 destroyed by fire.
April 20	Goods costing ₹ 50,000 were damaged in transit; a claim was made on railway authorities for the same.
April 22	Received from Salesman ₹ 60,000 for goods sold by him after deducting his travelling expenses ₹ 4,000.
April 25	Sold goods to Vishesh costing ₹ 40,000 at a profit of 25% and allowed him25 10% trade discount and paid for cartage ₹ 1,000 to be charged from him.
April 28	Received a cheque of ₹ 40,000 from the railway authorities in full settlement of a claim for damages in transit.

Answer

Date	Particulars		L.F	Amount Dr.	Amount Cr.
2023				₹	₹
April 1	No Entry as order received only
April 3	Bank A/c	Dr.		1,80,000
	To Shekhar & Co. A/c (Advance) (Advance received against an order of ₹ 5,00,000)				1,80,000
April 5	Gupta & Sons A/c(Advance)	Dr.		1,00,000
	To Bank A/c (Paid Rs.1,00,000 advance against an order of ₹ 2,50,000)				1,00,000
April 7	Purchases A/c	Dr		2,50,000
	To Gupta & Sons A/c (Goods purchased)				2,50,000
April 10	Gupta & Sons A/c (1,50,000 × 60%)	Dr.		90,000
	To Bank A/c (60% of ₹ 1,50,000 paid on account)				90,000
April 15	Loss by fire A/c (20,000+10,000)	Dr.		30,000
	To Purchases A/c				20,000
	To Furniture A/c (Goods and furniture destroyed by fire)				10,000
April 20	Railway claim A/c	Dr		50,000
	To purchases A/c (Claim made from railways for goods damaged in transit)				50,000
April 22	Cash A/c	Dr.		60,000
	Travelling Expenses A/c	Dr.		4,000
	To Sales A/c (60,000+4,000) (Cash received from salesman after deducting his travelling expenses)				64,000
April 25	Vishesh A/c (Note 1) (45,000+1,000)	Dr.		46,000
	To Sales A/c (40,000 × 90% × 125%				45,000
	To Cash A/c (Goods sold on credit and paid for cartage ₹ 1,000 to be charged from him)				1,000
April 28	Bank A/c	Dr.		40,000
	Profit & Loss A/c (50,000-40,000)	Dr.		10,000
	To Railway Claim A/c (Money received from Railway authorities against the claim)				10,000
	Total ₹			8,60,000	8,60,000

Working notes:
(i)

Cost of Goods	40,000
Add: Profit: 25% of ₹ 40,000	10,000
	50,000
Less: Trade Discount: 10% of ₹ 50,000	5,000
	45,000
Add: Cartage	1,000
	46,000

(ii) It is assumed that the cheques received are deposited into the bank on the same day.in full settlement of a claim for damages in transit.

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Account 6 Marks Question

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