Depreciation Account - Depreciation

The loss on sale of an asset is debited to:

Charging depreciation is:

Depreciation is charged on:

Depreciation is a process of:

Amount of depreciation charged under diminishing balance method remains:

What is the difference between Straight Line Method and Diminishing Balance Method of charging Depreciation? (Any two)

Do you agree that Depreciation is a permanent, continuing and gradual reduction in the book value of a fixed asset?

What are the demerits of Straight Line Method? (Any two)

What are the merits of Written Down Value Method? (Any two)

What is meant by Asset Disposal Account?

If Depreciation reduces profits and value of fixed assets and thus, the capital of the owner, why do businesses charge Depreciation?

Define Depreciation.

Depreciation cannot be provided in case of loss in a financial year. Comment.

Explain the following briefly:

1. Asset Disposal Account.
2. Written Down Value Method of providing Depreciation.

Is Depreciation the result of fluctuations in the value of fixed assets?

In the following Machinery Account, determine the missing values, if depreciation is to be charged @ 10% p.a. on the Original Cost. On 1st October, 2018, the machinery was sold for ₹ 1,20,000.

A boiler was purchased from abroad for ₹ 10,000. Shipping and forwarding charges ₹ 2,000, Import duty ₹ 7,000 and expenses of installation amounted to ₹ 1,000.
Calculate the Depreciation for the first three years (separately for each year) @ 10% p.a. on Diminishing Balance Method.

In the following Machinery Account, determine the missing values, if depreciation is to be charged @ 10% p.a. per Diminishing Balance Method. On 1st October, 2018, a part of the machinery valued in the books of the firm at ₹ 16,000 on 1st July, 2016 was sold for ₹ 10,000.

In the following Machinery Account, determine the missing values, if depreciation is to be charged @ 10% p.a. as per Straight Line Method:

On 1st October, 2011, X Ltd. purchased a machinery for ₹ 2,50,000. A part of machinery which was purchased for ₹ 20,000 on 1st October, 2011 became obsolete and was disposed off on 1st January, 2014 (having a book value ₹ 17,100 on 1st April, 2013) for ₹ 2,000. Depreciation is charged @ 10% annually on written down value. Prepare Machinery Disposal Account and also show your workings. The books being closed on 31st March of every year.

A company purchased a machinery for ₹ 50,000 on 1st October, 2016. Another machinery costing ₹ 10,000 was purchased on 1st December, 2017. On 31st March, 2019, the machinery purchased in 2016 was sold at a loss of ₹ 5,000. The company charges depreciation @ 15% p.a. on Diminishing Balance Method. Accounts are closed on 31st March every year. Prepare the Machinery Account for 3 years.

On 1st April, 2015, furniture costing ₹ 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for ₹ 5,000. Additions are made on 1st April 2016 and 1st October, 2018 to the value of ₹ 9,500 and ₹ 8,400 (Residual values ₹ 500 and ₹ 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.

From the following transactions of a concern, prepare the Machinery Account for the year ended 31st March, 2019:

1st April, 2018	:	Purchased a second-hand machinery for ₹ 40,000.
1st April, 2018	:	Spent ₹ 10,000 on repairs for making it serviceable.
30th September, 2018	:	Purchased additional new machinery for ₹ 20,000.
31st December, 2018	:	Repairs and renewal of machinery ₹ 3,000.
31st March, 2019	:	Depreciate the machinery at 10% p.a.

Modern Ltd. purchased a machinery on 1st August, 2016 for ₹ 60,000. On 1st October, 2017, it purchased another machine for ₹ 20,000 plus CGST and SGST @ 6% each. On 30th June, 2018, it sold the first machine purchased in 2016 for ₹ 38,500 charging IGST @ 12%. Depreciation is provided @ 20% p.a. on the original cost each year. Accounts are closed on 31st March every year. Prepare the Machinery Account for three years.

Depreciation for the second year @ 10% on ₹ 15,000 purchase price ________ will be on the Fixed Instalment, whereas it will be ________ on the Diminishing Balance System.

Given the same rate per cent, assets depreciate faster by the __________ as compared to the __________.