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Class 11
Accountancy
Depreciation, Provisions and Reserves
basaria confectioner bought a cold storage plant o...

Question:
Basaria Confectioner bought a cold storage plant on July 01, 2014 for ₹ 1,00,000. Compare the amount of depreciation charged for first three years using:

Rate of depreciation @ 10% on original cost basis;

Rate of depreciation @ on written down value basis;

Also, plot the computed amount of depreciation on a graph.

Answer:

Depreciation for 1 year (2014-15) = 7500 (Charged for 9 months)

Depreciation for 2 year (2015-16) = 1,00,000 – 7500 = 92,500
= ₹ 92500 × 10/100 = ₹ 9250

Depreciation for 3 year (2016-17) = ₹ 92500 – ₹ 9250 = 83050
= ₹ 83050 × 10/100 = ₹ 8305

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Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.

From the above, answer the following :
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2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
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10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.

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What is a journal? Give a specimen of journal showing at least five entries.

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