Carriage Transport Company purchased 5 trucks at the cost of Rs. 2,00,000
each on April 01, 2011. The company writes off depreciation 
20
p.a. on
original cost and closes its books on December 31, every year. On October 01,
2013, one of the trucks is involved in an accident and is completely destroyed.
Insurance company has agreed to pay Rs. 70,000 in full settlement of the
claim. On the same date the company purchased a second hand truck for Rs.
1,00,000 and spent Rs. 20,000 on its overhauling. Prepare truck account and
provision for depreciation account for the three years ended on December 31,
2013. Also give truck account if truck disposal account is prepared.
Answers
Answer:
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Truck Account with Truck Disposal A/c for 3 years
Explanation:
In the Books of Carriage Transport Co.
Truck A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
1.4.11 To Bank A/c 10,00,000 31.3.11 By Balance c/d 10,00,000
1.1.12 To Balance c/d 10,00,000 31.3.12 By Balance c/d 10,00,000
1.1.13 To Balance b/d 10,00,000 1.8.13 By Truck Disposal 2,00,000
1.8.13 To Bank 120000 31.3.13 By Balance c/d 920000
Provision for Depreciation A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
31.3.11 To Balance c/d 150000 31.3.11 By Dep. A/c 150000
31.3.12 To Balance c/d 350000 1.1.12 By Balance c/d 150000
31.3.12 By Dep. A/c 200000
1.8.13 To Truck Disposal 100000 1.1.13 By Bal. b/d 350000
1.8.13 To Bal. c/d 446000 1.8.13 By Dep. A/c 30000
31.3.13 By Dep. A/c 166000
Truck Disposal A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
1.8.13 To Truck A/c 200000 1.8.13 By Prov. for Dep. 100000
By Insurance Co. 70000
By P&L A/c 30000
(Loss)