Question

Question 7.
A Van was purchased on 1st April, 2015 for ₹ 60,000 and ₹ 5,000 was spent on its repair and registration. On 1st October, 2016 another van was purchased for ₹ 70,000. On 1st April, 2017, the first van purchased on 1st April, 2015 was sold for ₹ 45,000 and a new van costing ₹ 1,70,000 was purchased on the same date. Show the Van Account from 2015-16 to 2017-18 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

Answer 1

Answer:

Explanation:

Calculation of Depreciation

Van 1 = 65000 * 10 /100= 6500

Van 2 = 70000 * 10 /100 = 7000

Van 3 = 170000 * 10 /100= 17000

Calculate profit and loss  a/c  on sale of Van

Book value on Apr 01, 2017 = 52000

Less : sale of van                  =  (45000)

Loss on sale of Van = 7000