On October 01, 2010, a Truck was purchased for Rs. 8,00,000 by Laxmi
Transport Ltd. Depreciation was provided at 15
p.a. on the diminishing
balance basis on this truck. On December 31, 2013 this Truck was sold for
Rs. 5,00,000. Accounts are closed on 31st March every year. Prepare a Truck
Account for the four years.
Answers
Truck A/c showing Depreciation for 4 years
Explanation:
In the Books of Laxmi Transport Ltd.
Truck A/c
Particulars Amount(Rs.) Particulars Amount(Rs.)
1.10.10 To Bank A/c 8,00,000 31.3.11 By Depreciation 60,000
(6 months)
By Balance c/d 7,40,000
1.4.11 To Balance b/d 7,40,000 31.3.12 By Depreciation 1,11,000
By Balance c/d 6,29,000
1.4.12 To Balance b/d 6,29,000 31.3.13 By Depreciation 94,350
By Balance c/d 5,34,650
1.4.13 To Balance b/d 5,34,650 31.12.13 By Depreciation 60,148
31.3.15 To P&L A/c 25,498 (9 months)
(Profit on sale) By Bank A/c 5,00,000
*Working Notes:
1)Calculation of Profit/Loss on sale of Truck
Total Value of Truck as on 31.12.13 Rs.5,34,650
Less:Depreciation for 9 months (Rs,60,148)
Net Value of Truck Rs.4,74,502
Sale Price of Truck Rs.5,00,000
Profit on sale Rs.25,498