Question

mapie Trupee.
The LG Transport company purchased 10 trucks at 45,00,000 each on 1st April 2014. On October 1st,
16 one of the trucks is involved in an accident and is completely destroved and 27,00,000 is recen
from the insurance in full settlement. On the same date another truck is purchased by the company
for the sum of 50,00,000. The company write off 20% on the original cost per annum. The company
observe the calendar year as its financial year.
Give the motor truck account for two year ending 31 Dec, 2017
SWERS/HINTS
437400- 43740
-39 3660-39
354294​

Answer 1

Explanation:

Hope this may help you

Answer 2

MOTOR TRUCK ACCOUNT

1. Taking the final cost of trucks as at 1st January 2016 to motor truck account as balance b/d from the value found in working notes.
2. Charging depreciation of 9 months for the truck that met with an accident.
3. Crediting the amount received from the insurance company in full settlement and debiting the profit of rs. 4,50,000.
4. Purchase of new truck has been made on 1/10/16.
5. Depreciation charged for the rest of the motor trucks for a complete year and balance been carried down.
6. Balance brought down to 1/1/2017. Depreciation is being charged for the complete year on all the trucks and the balance is carried down for next year.

Please find the motor truck account attached.

WORKING NOTES :

Cost of all the trucks purchased on 1/4/14:                      4,50,00,000

LESS : Depreciation for 9 months year 2014 :                      67,50,000    

LESS : Depreciation for complete year 2015 :                      90,00,000  

Value of motors trucks as on 1/1/16:                                    2,92,50,000