the LG transport company purchased 10 trucks at Rs. 4500000 each on 1.4.2014. On 1st October 2016, one of the truck is involved in an accident Landis completely destroyed and Rs 2700000 is received from the insurance in full settlement. On the same date another truck is purchased by the company for the sum of Rs. 5000000. The company write off 20% on the original cost per annum. The company observes the calender year as its financial year. Give the motor truck account for two years ending December 31, 2017
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Answer:
Answer :
Dr Truck Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2001 Apr 1 To Bank A/c 10,00,000 2001 Dec 31 By Balance c/d 10,00,000
10,00,000 10,00,000
2002 Jan 1 To Balance b/d 10,00,000 2002 Dec 31 By Balance c/d 10,00,000
10,00,000 10,00,000
2003 Jan 1 To Balance b/d (T1) 10,00,000 2003 Oct 1 By Truck Disposal A/c 20,00,000
Oct 1 To Bank A/c (T2) 1,20,000 Dec 31 By Balance c/d 9,20,000
11,20,000 11,20,000
Dr Provision for Depreciation Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2001 Dec 31 To Balance c/d 1,50,000 2001 Dec 31 By Depreciation A/c 1,50,000
1,50,000 1,50,000
2002 Dec 31 To Balance c/d 3,50,000 2002 Jan 1 By Balance b/d 1,50,000
Dec 31 By Depreciation A/c 2,00,000
3,50,000 3,50,000
2003 Oct 1 To Trunk Disposal A/c 1,00,000 2003 Jan 1 By Balance b/d 3,50,000
Dec 31 To Balance c/d 4,46,000 Oct 31 By Depreciation A/c (Dep till Oct 9 months) 30,000
Dec 31 By Depreciation A/c (Old)(T1) 1,60,000
(New)(T2) = 6,000
1,66,000
5,46,000 5,46,000
Dr Truck Disposal Account Cr
Date Particulars JF Amt.(Rs) Date Particulars JF Amt.(Rs)
2003 Oct 1 To Truck A/c 2,00,000 2003 Oct 1 By Provision for Depreciation A/c 1,00,000
Oct 1 By Insurance Co (Claim Amount) 70,000
Oct 1 By Profit & Loss A/c (Loss on Sale) 30,000
2,00,000 2,00,000
Working Note
Total Depreciation Charged on Truck @ 20%
Dec 2001 = 30,000
Dec 2002 = 40,000
Oct 2003 = 30,000
Rs.1,00,000
Cost of truck at disposal = 2,00,000−1,00,000=Rs.1,00,000
Profit or Loss on sales of truck
= 1,00,000−70,000=Rs.30,000