Question

The Speed Transport Company purchased a motor truck for 30,000 on 1st April, 2009. On July 1, 2009 another
truck was purchased for 12,000. On 1st Oct., 2011 the truck purchased on April 1, 2009 was sold for * 12,000
and a new truck was purchased for * 26,000 on the same date. On Aug. 1, 2012 the company exchanged, the
latest purchased truck for a new truck with the same vendor. The exchange agreement included the adjustment
of 20,000 for the truck returned and payment of * 10,000 in cash. The payment was made on 5th Aug., 2012.
The company further purchased a new truck for * 31,500 on 1st Oct., 2013. This Truck met accident on Dec. 1,
2014 and completely wrecked. The company received 20,000 from the insurance company in full satisfaction
of the claim on Dec. 28, 2014. The books are closed on 31st March each year and the company charges
depreciation 20% p.a. according to the fixed instalment method. Prepare Motor Truck Account​

Answer 1

Answer:

Calculation of rate of depreciation of car p.a. :

Particulars

Amount (Rs.)

Less:

Less:

Book value of car as on 1.04.08

Sales value of asset as on 31.03.09

Loss on sales

Depreciation on car for the year 1.04.08 - 31.03.09

300000

(165000)

(75000)

60000

Rate of depreciation = (Depreciation on Asset / book value of asset) * 100

Rate of depreciation = Rs. (60000/300000) * 100

Rate of depreciation = 20%

Explanation:

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