CA Foundation Test Paper – Depreciation Accounting
Time Allowed: 1 Hour
Maximum Marks: 50
- A Plant & Machinery costing Rs. 10,00,000 is depreciated on straight line assuming 10 year working life and residual value is Rs. 1,00,000, for four years. At the end of the fourth year, the machinery was revalued upwards by Rs. 40,000. The remaining useful life was reassessed at 8 year with residual value is Rs. 80,000 . Calculate Depreciation for the fifth year.
6 Marks
- A Firm purchased an old Machinery for Rs. 37,000 on 1st January,2019 and spent Rs. 3,000 on its overhauling. On 1st July 2020, another machine was purchased for Rs. 10,000. On 1st July 2021, the machinery which was purchased on 1st January 2019, was sold for Rs. 28,000 and the same day a new machinery costing Rs. 25,000 was purchased. On 1st July,2022, the machine which was purchased on 1st July, 2020 was sold for Rs. 2,000.Depreciation is charged @ 10% per annum on straight line method. The firm changed the method and adopted diminishing balance method with effect from 1st April,.2019 and the rate was increased to 15% per annum. The books are closed on 31st March every year. Prepare Machinery account for four years from 1st April,2019
Maximum Marks: 12
- M/s. Seven Seas purchased a second-hand machine on 1st April, 2017 for Rs. 1,60,000. Overhauling and erection charges amounted to Rs. 40,000. Another machine was purchased for Rs. 80,000 on 1st Oct, 2017. On 1st Oct, 2019, the machine installed on 1st April, 2017 was sold for Rs. 1,00,000. Another machine for Rs.30,000 was purchased and was installed on 31st December, 2019.Under the existing practice the company provides depreciation @ 10% p.a. on original cost. However, from 1st April,2020 it decided to adopt WDV method and to charge depreciation @ 15% p.a. You are required to prepare Machinery account for the years 2017 to 2021.
Maximum Marks: 12
- The M/s Nishant Transport purchased 10 Buses at Rs. 15,00,000 each on 1st April 2017. On October 1st, 2019, one of the Buses is involved in an accident and is completely destroyed and Rs. 7,00,000 is received from the insurance in full settlement. On the same date, another bus is purchased by the company for the sum of Rs. 18,00,000. The company write off 10% on the original cost per annum. The company observe the calendar year as its financial year.
You are required to prepare the buses account for two year ending 31 Dec, 2020.Maximum Marks: 8
- M/s Roxy purchased a brand new machinery on 1st January 2017 for Rs. 3,20,000 and also incurred Rs. 80,000 on its installation. Another machinery was purchased on 1st July 2017 for Rs. 1,60,000. On 1st July 2019, the machinery purchased on 1st January 2017 was sold for Rs. 2,50,000. Another machinery was purchased and installed on 30th September 2019 for Rs. 60,000. Under existing practice, the company provides for depreciation @10% p.a. on Original cost. However, from the year 2020 it decided to adapt WDV method and charge the depreciation @ 15% p.a. You are required to show the Machinery Account for the years 2019 and 2020 considering the books of accounts are closed on 31st December each year.
Maximum Marks: 12