Cash Book

1. Write out the following transactions in Cash Book with discount, Cash and Bank columns:
Jan.1 Chanda commences business with Rs. 30,000 in cash.
Jan.3 He pays Rs. 19,000 into Bank current account.
Jan.4 He received cheque for Rs. 600 from Kumar & Co. on account.
Jan.7 He pays into Bank Kumar & Co. cheque for Rs. 600.
Jan.10 He pays Ram & Co. by cheque Rs. 330 and is allowed discount Rs. 20.
Jan.12 Tripathi & Co. pays into his Bank Account Rs. 475.
Jan.13 He Receives cheque for Rs.450 for Pawn and allowed discount Rs.10.
Jan.15 He Receives Cash Rs.75 and cheque for Rs.100 for cash sales.
Jan.16 He pays into Bank Rs.1, 000.
Jan.17 He pays by cheque for cash purchases Rs. 275.
Jan.18 He pays Sundry expenses in cash Rs. 50.
Jan.20 He pays Sharma & Co. Rs. 375 in cash and is allowed discount Rs. 25.
Jan.21 He pays office Rent by cheque Rs. 200.
Jan.22 He pays staff salaries by cheque Rs.300.
Jan.23 He draws a cheque for private use Rs. 250.
Jan.24 He drew a cheque for office use Rs. 400.
Jan.25 He pays cash for stationery Rs. 25.
Jan.28 He purchased goods for cash Rs. 125.
Jan.29 He pays jay by cheque for commission Rs. 300.
Jan.30 He gives cheque to Ram Gopal for cash Purchases of furniture for office Rs.1, 575.
Jan.31 He Receives cheque for commission Rs. 500 from Roy & Co. and pays the same into Bank.
Jan.31 He receives cheque for keshav & Co. For Rs.450.

2. Enter the following transactions in a triple column cash book of M/S Barkat & Co.:
April.1 Cash in hand Rs. 237, balance at bank Rs. 6,594.
April.2 Received from K. Agrawalla cash Rs. 590 allowed him discount Rs. 10.
April.4 Paid salaries for March by cash Rs. 200.
April.5 Cash sales Rs. 134.
April.7 Paid B.K Bose by cheque Rs. 300.
April.8 Paid Q Ahmed by cheque Rs. 585 discount received Rs. 15.
April.9 Received from G.C Dhar Rs. 194 by cheque discount allowed Rs. 6.
April.10 Bank notifies that G.C Dhar cheque is dishonored.
April.11 Deposited with Bank Rs. 300.Paid Wages Rs. 72. Bank charges as shown in pass book Rs. 5.

3. Hafiz Ali of Bombay deposits all his daily receipts in a bank and makes all payments through bank.
Following transactions took place in April 2011. Prepare cash book with bank and discount columns. April
1, Debit balance of bank Rs. 8,000. April 5, received Rs. 2,000 from Mohan in full settlement of the
amount of Rs. 2050. April 7, paid Rs. 2500 to Suresh, he allowed discount of Rs. 25. April 10, purchased
goods Rs. 4,950, April 15, paid Rs. 200 for wages and Rs. 700 for salaries, April 20, Received Rs. 1,000
from Mohan. April 25, purchased furniture for Rs. 500, April 27, Received Rs. 300 from dinesh and
allowed him discount Rs. 15, April 28, Received Rs.900 from Mr. X and allowed him discount Rs. 10, April
29, paid Rs. 3,000 to B by cheque.

4. From the given information prepare three column cash book.

a) M/S Ram and Co. supplied the following information Oct. 2011.
b) Balance cash Rs. 710 Bank (Cr.) Rs. 5,120;
c) Cash sales Rs. 17,500, Cash purchases Rs. 5,300, Cartage Rs. 300, and Wages Rs. 700.
d) Collected a cheque from M/S Ramvir of Rs. 17,200, discount allowed Rs. 100. Endorsed Ramvir’s
cheque to M/S bhurelaal and sons for goods purchased Rs. 20,000 and balance in cash. M/S
Bhurelaal and sons offered 1% Cash discount.

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 e) Collected a cheque from M/S Agra Stores of Rs. 21000. Rs. 200 were allowed as discount.
f) Collected a cheque of Rs. 45,000 from M/S Kanpur Stores in full settlement of their dues Rs. 45,500.
g) Paid to M/S Shridhar Stores Rs. 36,000 in full settlement of their dues Rs. 36,300.
h) Withdraw Rs. 12,000 and paid Rs. 2,000 on account of provisions for purchase for the proprietor
and Rs. 500 for school fees of proprietors children. Rs. 7,000 were paid to proprietor’s friend in full
settlement of personal loan of the proprietor; got the information that Ramvir’s cheque was
dishonored and Mr. Bhurelaal and sons paid Rs. 25 as bank charges.
i) Issued a draft in favor of M/S Bhurelaal and sons paid bank charges of Rs. 15. M/S Bhurelal and sons
however did not agree to give cash discount earlier offered. Collected another cheque from M/S
Ramvir covering all damages including. Withdrawal of cash discount by M/S Bhurelal and sons; also
the cash discount offered to them was withdrawn. Record the above mentioned transactions in a
suitable Cash book and show the Posting to the Discount Received and Discount allowed Accounts.

5. Enter the following transactions in single column Cash Book:

Cash in Hand 5,000
10,00
Cash Sales
0
Received from pravin on 15,00
account 0
Purchased goods 6,000
Loan given to Mohan 2,000
Sold goods to sohan in cash 8,000
Purchased furniture 4,000
Purchased postal stamps 500
Sold goods to Ram on credit 4,500
Salary paid to accountant 5,000
Purchased goods 2,500
Paid freight 200
Withdrew for personal use 4,000
Received commission 2,000
Paid to shyam 2,500
Received from Mohan 2,000
Paid to Girish 1,000
Rent paid 5,000

6. Write-up Single Column Cash Book for the month of April, 2014 of Rahul, a Trader, from the following
transactions:
Particular Rs.
Cash in Hand 25,000
2,60,00
Cash sales
0
2,00,00
Deposited cash into bank
0
Paid cheque to creditors of Rs.49, 000 after deducting cash dis.
3,100
Of
Wages paid in cash 22,500
1,50,00
Cash sales of Rs.1,80,000 of which banked on 7th April
0
Paid to transport Corporation of India against their Bill No.265 4,500
Paid wages in cash 28,500
Paid to casual Labour 3,600
Cash sales 1,14,00

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 0
Deposited cash into Bank 75,000
Purchased goods on credit from U& Co. 15,000
1.92,00
Cash sales
0
Paid cash to Sharp, a creditor, after deducting discount Rs. 500 9,500
Paid electricity bill in cash 9,000
Cash collected from Mahesh (Dr.) after allowing discount of
45,000
2,500

7. 2014 Prepare Three-column Cash Book from the following transactions:

April 1.Cash in Hand Rs.1, 200, Overdraft at Bank Rs.15, 000.
3.Capital introduced Rs.20, 000 out of which Rs.16, 000 is by cheque and is deposited in the bank.
4.Purchased goods from Shyam Traders Amounting to Rs.3, 000 and they allowed trade discount
Rs.200. The amount was paid by cheque.
4. Goods purchased for cash Rs.4, 000.
5. Sold goods to Mohan on credit Rs.5, 000.
6. Received cheque from Rakesh Rs.2, 450, Allowed him discount Rs.50.
10. Cheque received from Rakesh deposited into Bank.
11. Settled the account of Tej Printers Rs.750 by paying cash Rs.680.
12. Cash Received from Rs.4, 750 in full settlement of his account of Rs.5, 000.
16. An amount of Rs.1, 000 due from Gupta Brothers written off as bed debts in the previous year,
now recovered.
17. Received from Murli on behalf of Manohar Rs.200.
19. Received a cheque for Rs.800 from Mukesh, which was endorsed to Nitin on 24 th April.
20. Sale of old furniture, payment received in cash for Rs. 720.
25. Cashed a cheque for Rs.3, 000.
25. Drew from Bank for household expenses Rs.1, 000 and for income tax Rs.500.
28. Surendra he owed Rs.4, 000 became bankrupt and paid 60 paisa in a rupee.
28. Received repayment of a loan Rs.3, 000 and deposited out of it Rs.2, 500 into the bank.
30. Interest debited by the bank Rs.375.
30. Deposited with the bank the entire balance after retaining Rs.2, 000 at office.

8. 2014 Prepare Two-column Cash book from the following transactions for the month of May, 2014:
May 1. Cash Balance Rs.25, 000.
2. Paid to Mohan in full settlement of Rs. 5,000. 4,750.
4. Received from Vikas, allowing him discount of Rs.400. 9,600.
7. Cash purchases 10,000
11. Cash sales 15,000.
15. Received from Jatindar, allowed him discount Rs.500 19,500.
21. Paid to anuj against his dues of Rs.7, 500 7,000.
25. Paid into Bank 20,000.
31. Withdraw for personal use. 5,000
31. Paid Salary and wages 15,000.

9. . 2014 Enter the following transactions in two-column Cash book:

April 1. Balance from the last month 1, 87,900.
2. Received cash from S.K Agarwal 3, 40,000.
4. Purchased a walkman for private use 1, 00,000.
5. Purchased goods for cash 1, 50,000.
6. Cash sales 1, 86,000.
6. Paid wages 15,000.
8. Received from Mukesh Chand 1, 00,000.

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 9. Paid Naresh Chand in full settlement of his account of Rs.25, 000 22,500.
12. Paid for V.P.P of goods from Chandigarh 24,300.
13. Sent Money order to Satish Chand 15,000.
13. Money order commission 200.
14. Krishna chand paid cash to us 1, 23,600.
Discount allowed 1,300.
18. Cash purchases 29,000.
21. Paid for general expenses 1,400.
24. Received from Anand Prakash 28,000.
28. Paid for stationery 2,500.
30. Paid water bill 1,000.
30. Paid for charity 500.
30. Purchased a pen for his son 20,000.

10. . 2008.Three-column Cash Book (Cash Book with discount, Cash and Bank columns)
Enter the following transactions in a Cash Book with Cash And bank columns:
Dec.1. Started business with cash 50,000.
2. Paid into Bank 29,000.
3. Received cheque from Raja & Co. 800.
5. Withdrew cash from Bank for private use 240.
14. Received cheque from Kamla 395.
16. Kamla’s cheque endorsed to Bala in full settlement of her account of 425.
29. Paid bills payable by cheque 1,000.
30. Deposited into bank, balance of cash in excess of Rs.450 1,000.

11. 2014. Record the following transactions in three-column Cash Book and balance the book on 31 st
January, 2014:
Jan.1. Cash in hand 5,670.
1. Cash at Bank 1, 26,750.
2. Deposited in Bank 5,000.
5. Received from A and 7,900.
Allowed discount 100.
7. Purchased furniture for cash 2,500.
8. Paid to B by cheque and 7,450.
Received discount 50.
13. Received from C by cheque and deposited into bank 5,000.
15. Cash sales 7,850.
15. Deposited into bank 10,000.
17. Purchased a motor car and paid by cheque 52,400.
19. Withdrew from bank for office use 2,500.
22. Purchased goods for cash 3,500.
25. Paid establishment expenses through bank 4,500.
31. Paid rent in cash 500.

12. 2013. Prepare Three-column Cash Book from the following transactions:
June 1. Cash balance 500.
1. Bank balance 1,750.
5. Cash received from sale of shares 5,500.
6. Paid into Bank 5,000.
7. Paid S. Bose by cheque 1,250.
9. Paid wages in cash 300.
20. Received from A. Mukherji by cheque and sent to bank 600.
21. Drew from Bank 500.

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29. Paid office salaries in cash 400.
30. Sold goods for cash and banked the same 800.
30. Paid rent by cheque 100.
30. Paid into Bank 750.

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13. Enter the following transaction in single column cash book:
Date Particular Rs.
2014 Cash in hand 1,70
Jan.1 0
5 Paid to R.Bansal 300
Discount allowed by him 10
8 Purchases goods from Goyal &Co. for cash 400
10 Received from R.Kansal 980
Discount allowed 20
16 Sold goods to Garg & Co. for cash 400
21 Paid to S. Ansel 295
Discount Received 5
25 Paid Wages 50
31 Paid to X & Co. in full settlement of his 390
account
Which shows a credit balance of Rs.400
31 Purchases furniture 200
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14. Prepare a simple cash book from the following transactions of Mr. Ram Gopal of Delhi.
Date Particular Rs.
April 1 Mr. Ram gopal commenced business with 8,00
cash 0
3 He bought goods for cash 5,00
0
5 Sold goods for cash 100
6 Received cash from Mr Mohan lal 360
9 Paid into bank 3,00
0
13 Paid cash to Hari Krishan 215
16 Sold goods for cash 1,50
0
17 Paid for stationery 15
Paid for office furniture 185
21 Received from Mr. Kailash chand 680
22 Paid for advertising 90
25 Purchasad Postage Stamps 8
28 Paid rent 100
30 Paid electricity charges 15

15. Prepare a two column cash book from the following transactions of Shri R. K. Gupta.
Date Particular Rs.
2014 Cash in hand 4,00
Jan 1 0
6 Cash Purchases 2,00
0
10 Wages paid 40
11 Cash Sales 6,00
0
12 Cash received from 1,98
suresh 0
Allowed him discount 20
19 Cash paid to munna 2,47

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 Discount receives 0
30
27 Cash paid to Radhe 400
28 Purchasesd goods for 2,07
cash 0

16. Compile Cash book with discount column from the following transaction:
Date Particular Rs.
2014 Mr.Ganesh Lal commenced business with 6,50
March.1 cash 0
3 Bought goods for cash 685
4 Paid Mr.Mohan lal cash 95
Discount allowed 5
6 Deposited in bank 4,00
Paid for office furniture in cash 0
465
9 Sold goods for cash 3,00
0
12 Paid wages in cash 120
13 Paid for stationery 40
15 Sold goods for cash 2,50
0
17 Paid for miscellaneous expenses 45
19 Received cash from Mr.triloc chand 485
Allowed him discount 15
21 Purchases a radio set 250
22 Paid salary 400
25 Paid rent 90
28 Paid electricity bill 35
29 Paid advertising 40
31 Paid into bank 2,50
0

17. Enter into Naresh’s cash book the following transaction which took place on February 28,2014 and
balance the cash book:
I. Balance brought forward from the previous from the previous day: Cash in hand Rs. 100 at bank Rs.
8,000.
II. Instructed the bank to issue a bank draft for Rs. 5,000 in favour of Suresh.the bank charged Rs. 10 for
issuing the draft.
III. Recived a bank to issue a bank draft for Rs. 5,760 from Mahesh in full settlement of Rs. 6,000 due from
him sent the draft to the bank.
IV. Received a crossed cheque from rakesh for Rs. 2,000 allowed him discount Rs. 120.
V. Endorsed rakesh’s cheque in favour of harish.
VI. Send a crossed cheque for Rs. 50 in payment of school fees of naresh’s son .
VII. Withdrew Rs. 500 from the bank.
VIII. Placed an order with vikas for goods of the value of Rs. 1,000 and sent cheque for Rs. 1,000 with the
order.

18. Prepare a three column cash book of M/s Tulsian & Co. from the following particular.
2014
Jan.1 Cash in hand Rs. 50,000 bank overdraft Rs. 20,000.
2. paid into bank Rs. 10,000.

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 3. Bought goods from Hari for Rs. 200 FOR CASH.
4. Bought goods for Rs. 2,000 paid cheque for them discount allowed 1%.
5. Sold goods to Mohan for cash Rs. 1,175.
6. Received a crossed crossed cheque from shyam to whom goods were sold for Rs.800 discount allowed
12.5%.
7. Shyam’s cheque deposited into bank.
8. Purchases an old typewriter for Rs. 200. Spent Rs. 50 on its repairs.
9. Bank notified that shyam’s cheque has been returned dishonoured and debited the account in respect
of charges Rs.10.
10. Received a money order for Rs. 25. From hari.
11. Shyam settled his account by means of a crossed cheque for Rs. 820. Rs. 20 being for interest
charged.
12. Withdrew from bank Rs. 10,000.
18. Discounted a B/E for Rs. 1, 000 at 1% throught bank.
20. Honoured our own acceptance by cheque Rs. 5,000.
22. Withdrew for personal use Rs. 1,000.
24.Paid trade expenses Rs. 2,000.
25. Withdrew from bank for private expenses Rs.1,500.
26. Purchased machinery from Rajiv for 5,000 and paid him by means of a bank draff purchased for Rs.
5,005.
27. Issued cheque to Ram Saran for cash purchase of furniture Rs. 1,575.
28. Received a crossed cheque for commission Rs.500 from R.& Co. and deposited into bank.
29. Ramesh who owed us Rs.500 became bankrupt and paid us 50 paise in the rupee.
30. Received payment of a loan of Rs. 5,000 and deposited Rs. 3,000 out of it’s into bank.
31. Paid rent to landlord mohan by a Cheque of Rs. 220.
31. Interst allowed by bank Rs. 30.
31. Half yearly bank charges Rs. 50.

19. Write the following transaction in cash book with discount and bank columns:
2014
Jan 1 Chander commences business with Rs.20,000 in cash.
Jan 3 He pays Rs. 19,000 into bank current A/C.
Jan 4 He receives a crissed cgeque for Rs. 600. From kirti & Co. on account.
Jan 7 He pays into bank kirti & Co.’s cheque for Rs. 600.
Jan 10 He pays Ratan & Co. by cheque Rs. 330. and is allowed discount Rs. 20.
Jan 12 Tripathi & Co. pay into hes bank A/c Rs. 475.
Jan 15 He received a crossed cheque for Rs. 450 from warsi and allows him disxount Rs. 35 and deposits
the cheque into the bank.
Jan 20 He received cash Rs. 175 and a crossed cheque Rs. 100 for cash sales and deposits the cheque
into the bank.
Jan 25 He pays into bank 1,000.
Jan 27 He opaus by cheque for cash purchases Rs. 275.
Jan 30 He pays John & Co. Rs. 375 in cash and is allowed discount Rs.35.
He pays staff salaries by cheque Rs. 300.
He draws a cheque for personal use Rs. 250.
Jan 31 He draws a cheque for office use Rs. 400.
He pays cash for stationery Rs. 25
He purchases goods for cash Rs. 125.
He pays jagpal by cheque for commission Rs. 300.
He gives Cheque to ram saran for cash purchases of furniture for office Rs. 1,575.
He receives a crossed cheque for commission Rs. 500 from raghubir & Co. and pays the same into bank.
He receives a crossed cheque from kesri & Co. for Rs. 45 and deposits cheque into the bank.

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20. Prepare a three column cash book from the following particulars:
2014
Jan 1 cash in hand Rs. 1,600 and in bank Rs. 10,000.
Jan 2 Discounted a bill for Rs. 5,000 at 1% through bank.
Jan 5 Bought goods by cheque Rs.8,000.
Jan 8 Bought goods for cash Rs. 200.
Jan 10 Paid 6,000 by cheque for a bill drawn upon us.
Jan 12 Paid trade expenses Rs. 100.
Jan 17 Paid into bank Rs. 1,000.
Jan 18 Jones who owed us Rs. 200 became bankrupt and paid 50 paise per rupee.
Jan 20 Received Rs. 100 from govind and allowed him discount Rs. 2.
Jan 21 Paid Rs. 250 to Madan and he allowed us discount Rs. 5.
Jan 22 Withdrew from bank Rs. 200.
Jan 24. Received Rs.2,000 for a B/E from ram Chandra and deposited the same into bank.
Jan 25 Withdrew from bank for private expenses Rs. 100.
Jan 26 sold goods for cash Rs. 100.
Jan 27 Received a crossed cheque fo0r goods sold Rs. 9,000.
Jan 28 Received repayment of a loan Rs. 3,000 and deposited out of it Rs. 2,500 in the bank.

21. From the following particular, write cash book of Hari and Sunil:
2014
Mar 1 cash in hand 482
Mar 1 Bank balance 362
Mar 4 Paid salaries in cash 220
Mar 4 Paid satish & Co.by a crossed cheque in full settlement
old their claim of Rs.265 260
Mar 5 Received from ram & mohan , on account cheque for 400
Mar 6 Bought goods for cash 25
Mar 7 Cash sent to bank 100
Mar 8 Paid hari bros. by cheque (discount allowed Rs.3) 64
Mar 9 Received from Mohan bros. in coins and notes 150
Mar 11 Received from ramesh & Co. a crossed Cheque
(discount allowed Rs. 8) 160
Mar 12 Drawn from bank 200
Mar 14 Paid wages 270
Mar 14 Cheque from ramesh & Co. returned dishonored and
Bank debits account in respect of charges 2
Mar 14 Interst collected by bank 30
Mar 14 Goods sold to Mr Sky for cash 80
Mar 15 Bought goods from gyan chand on credit 27

22. Prepare a Bank Column cash book from the following transaction:
2014
Oct 1 Cash in hand 1080
Cash at bank 6,600
Oct 5 Discount a B/E at 1% throught bank 2,400
Oct 7 Bought goods by cheque 4,200
Oct 8 Bought goods by cash 300
Oct 10 Honoured our own acceptance by cheque 3,000
Oct 14 Paid trade expenses 63
Oct 16 Paid into bank 600
Oct 18 Ramesh who owed us Rs.300 became bankrupt
and paid us 50 paise in the rupee

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 Oct 20 Received cash from Manohar 240
Allowed discount 6
Oct 23 Withdrew from bank 240
Paid to ghanshyamdas & Co. 180
Allowed us discount 6
Oct 24 Received Rs. 1,200 for a B/E from ram and deposited
The same into bank
Oct 25 Withdrew from bank for private expenses 180
Oct 27 Sold goods for cash 120
Oct 28 Received cheque for goods sold 5,400
Oct 29 Received payment of a loan of Rs.3,000
And deoposited 1,800 out of it into bank
Oct 30 Bank chages as per pass book 3

23. Prepare a three column cash book of M/s tulsian & Co. from the following particular.
Jan 1 Cash in hand Rs. 1,00,000 Bank overdraft Rs. 40,000
Jan 2 Paid into bank Rs. 20,000
Jan 3 Bought goods from hari for Rs. 400 for cash.
Jan 4 Bought goods for Rs. 4,000 paid cheque for them discount allowed 1%
Jan 5 Sold goods to mohan for cash Rs. 2,350.
Jan 6 Received a crossed cheque from shyam to whom goods were sold for Rs. 1,600.
Discount allowed 12.5%
Jan 7 Shyam’s Cheque deposited into bank
Jan 8 Purchases an old typewriter for Rs.400 Spoent Rs. 100 on its repairs.
Jan 9 Bank notified that shyam’s cheque has been returned dishonoured and debited the account5 in
respect of charges Rs. 20.
Jan 10 Received a money order for Rs. 50 from hari.
Jan 11 Shyam settled his account by means of a crossed Cheque for Rs. 1,640 Rs. 40 being for interest
charged.
Jan 12 With drew from bank Rs. 20,000
Jan 18 Discounted a B/E for Rs. 2,000 at 1% throught bank.
Jan 20 Honoured our own acceptance by cheque Rs. 10,000.
Jan 22 Withdrew for personal use Rs. 2,000.
Jan 24 Paid trade expenses Rs. 4,000.
Jan 25 Withdrew from bank for private expenses Rs. 3,000,
Jan 26 Purchases machinery from Rajiv for Rs. 10,000 and paid him by means of a bank draft purchases
for Rs. 10,010.
Jan 27 Issued cheque to ram saran for cash purchases of furniture Rs. 3,150.
Jan 28 Received a crossed cheque for commission Rs. 1,000 from R.& Co. and deposited into bank.
Jan 29 Ramesh who owed us Rs. 1,000 became bankrupt and paid us 50 paise in the rupee.
Jan 30 Received payment of a loan of Rs. 10,000 and deposited Rs. 6,000 out of its into bank.
Jan 31 Paid rent to landlord mohan by a cheque of Rs. 440.
Jan 31 Interest allowed by bank Rs. 60.
Jan 31 Half yearly bank charges Rs. 100.

24. Write the following transaction in cash book with discount and bank columne.
2014
Jan 1 Inder commences business with Rs. 12,000 in cash.
Jan 3 He pays Rs. 11,400 into bank current A/c.
Jan 4 He received cheque for Rs.360 from kirti & Co. on account.
Jan 7 He pays into bank kirti & Co.’s cheque for Rs. 360.
Jan 10 He pays ratan & Co. by cheque Rs. 198 and is allowed discount Rs. 12.

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 Jan 12 Tripathi & Co. pay into his bank A/c Rs. 285.
Jan 15 He received cheque for Rs. 270 from warsi and allows him discount Rs. 21 and deposits the
cheque into the bank.
Jan 20 He received cash Rs. 105 and cheque Rs.60 for cash sales and deposits thew cheque into the
bank.
Jan 25 He pays into bank Rs. 600.
Jan 27 He pays by cheque for cash purchases Rs. 165.
Jan 30 He pays john & Co. Rs. 225 in cash and is allowed discount Rs. 21.
He pays sundry expenses in cash Rs. 30.
Jan 31 He pays office rent by cheque Rs.120.
He pays staff salaries by cheque Rs. 180.
He draws a cheque for personal use Rs. 150 He draws a cheque for office use Rs. 240.
He pays cash for stationery Rs. 15.
He purchases goods for cash Rs.75.
He pays jagpal by cheque for commission Rs. 180.
He gives a crossed cheque to ram saran for cash purchases of furniture for office Rs. 945.
He received a crossed cheque for commission Rs. 300 from raghubir Co. and pays the same into bank.
He receives cheque from kesri Co. for Rs. 270 and deposits the cheque into the bank.

25. From the following particular prepare petty cash book on imprest system of shri lakshman & Co.
2014
Jan 1 Opening balance (on imprest system) 600
Jan 2 Paid for stamps 72
Jan 3 Paid cleaners wages 90
Jan 4 Paid for fare 96
Jan 5 Paid for office tea etc 90
Jan 6 Paid for repairs of cycle 60
Jan 7 Paid for advertisement 180
Jan 8/ Drew imprest from head cashier
Jan 9 Paid for cartage 60
Jan 10 Paid for treveling expenses 150
Jan 11 Paid for telegram sent 90
Jan 12 Paid for entertainment to travelling salesmen 120
Jan 13 Paid for repairs of cycle 60
Jan 14 Paid for printing bill 30
Jan 15 Paid for stationery 18
Jan 16 Drew imprest from head cashier

26. From the following particular write three column cash book of hari and sunil.
2014
Mar 1 Cash in hand 2,892
Mar 1 Bank balance 2,172
Mar 4 Paid salaries in cash 1,320
Mar 4 Paid satish & Co. by cheque in full settlement of their claim of Rs.1,590 1,560
Mar 5 Received from ram & mohan onn account cheque for 2,400
Mar 6 Bought goods for cash 150
Mar 7 Cash sent to bank 600
Mar 8 Paid hari bros. by cheque (discount allowed Rs.18) 384
Mar 9 Received from mohan bros. in coins and notes 900
Mar 11 Received from ramesh & Co. cheque (discount allowed Rs.48) 960
Mar 12 Drawn from bank 1,200
Mar 14 Paid wages 1,620
Mar 14 Cheque from ramesh & Co. returned dishonored and 12

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 bank debits account in respect of charges
Mar 14 Interest collected by bank 180
Mar 14 Cash Sales 480
Mar 15 Bought good from Gyan chand on credit 162

27. Shash brother stared business on 1 April ,2010 by introducing cash Rs. 2,00,000 goods worth
Rs.5,00,000 and furniture worth Rs. 3.00.0000 From the following transaction prepare ,a Two columnar
Chas Book, for April 2010 and post both discount to ledger account –
April 1 Goods sold for cash 20,000
2 Goods sold to Ravish for cash 30,000
3 Purchased goods for cash 10,000
4 Credit purchase from Rajiv 21,000
7 Paid rent 5.000
9 Chas Received from Ravish 29,400
Discount allowed to him 600
10 Goods sold to shivam on credit 20,000
12 Paid cash to Rajiv 20,370
Discount receive from him 630
14 Credit Purchased from Lakhan 30,000
15 Advertisement in news paper 2.000
16 Expenses on refreshment of customer 1,200
17 Goods withdraw for personal use 2,000
19 Cash drawings 10.000
20 Cash received from Shivam after deduction of 2% discount
22 Payment made to Lakhan after deduction of 3% discount
24 Deposited in bank 25,000
26 Cash purchased from Dinesh 20,000
27 Sold goods to Pankaj cash 5,000
30 Paid salaries 5,000
Paid electricity bill 800
Paid sundry expenses 400

28. Prepare three columnar Cash Book of Siya Trading Company from the following transaction and post the
transactions in to ledger –
2010
April 1 Cash balance 28,800
Bank overdraft balance 1, 20,200
2 Deposited in to bank 30,000
5 Received from Suresh 20,800
Allowed discount 1,200
7 purchased goods for cash 20,000
9 Payment made to Rajesh by cheque 18,000
Received discount 2,000
11 Cash sales 30,000
17 Withdraw from bank 8,000
18 Received cheque from Ritesh 45,000
Allowed discount 5000
20 Deposited Ritesh, s cheque in to bank –
25 Purchased goods from Bharat 15,000
27 Received commission 5,000
29 Payment made to Bharat by cheque ……
30 Paid salaries 12,000

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29. Write the following transaction in Cahs and Discount Columnae Cash Book of Yuvraj Kumbhaj-2010
Rs
Jan 1 Balance of last month 32,000
4 Cash purchases 5,800
6 Paid to Rajiv in full settlement of Rs. 5000………… 4.900
9 Cash sales 6,800
10 Paid wages 150
12 Commission received from Vipul 850
13 Paid electricity bill 500
15 Paid Telephone bill 1,200
16 Recharge mobaile 900
18 Cash purchase 5,000
20 Cash sales 6,000
22 Received Rs. 7200 from Seema and allowed discount Rs. 800
24 Paid to shobhit in full settlement of RS. 3,000............ 2940
25 Received from Kiran in full settlement of Rs. 8,000…… .7, 760
26 Deposited in to bank 6,000
28 Paid salaries 2,000
30 stationery purchased 200
30. Prepare a Three column Cash Book of Shyam & Co. from the following transactions for the month of April
-2010
April 1 Cash balance Rs. 45,480 and Ban balance (cr.) Rs. 6,480
2 Cash sales Rs. 6.500
3 Paid to Govind Rs. 2,800
4 Deposited into bank Rs. 20.000
5 Withdraw Rs. 2.000 by cheque for personal use.
6 Paid wages Rs. 2,000.
7 Purchased a table from Furniture House FOR Rs. 6000 and paid him by cheque.
8 Received a cheque of Rs. 6,900 from Ram Prasad in full settlement of his account
Which shows a debit balance of Rs. 7,000 and deposited the same in bank.
12 Purchased goods from Ramlal for Rs. 10, 000 at trade discount of 10% and paid him by cheque
after deducting Rs. 100 cash discount.
15 Drew from bank for office use Rs. 4, 000
18 Purchased goods from Mohan for Rs.10.000 and paid by cheque
21 Goods sold to Bipin Rs. 10.000 and received cheque from him after deduction of 1%
Cash discount. Tha chaque was to send to the bank.
24 Cash sales Rs. 24000.
27 Purchased as furniture for Rs. 40.000 and payment made by cheque.
30 Paid salary by cheque Rs. 4,000
31. Write the following transactions in Three Columnar Cash Book-
2010
April, 1 Opening Balance: Cash Rs. 32, 000 bank Rs. 12, 000
3 Purchased goods and payment is made by cheque, Rs.4, 000
4 Cash sales Rs. 2,000
5 Cash sale RS. 1,200
6 Deposited in to bank Rs. 1200
9 Received from Ravish Rs. 1, 600 and allowed him discount Rs. 40
12 Withdraw by cheque for personal use Rs. 2000
14 Withdraw for personal use Rs. 200
16 paid for bills payable Rs. 2,400
17 Paid to Ramesh by cheque Rs. 1600. He allowed discount Rs. 40
19 Received from Dinesh by cheque Rs.2, 000 in full settlement of his of accountforRs.2,100
20 Endorsed Dinesh,s cheque in favour of Pankaj

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 22 Received arossed cheque of Rs. 1,200 from Rs. Narendra and allowed him
Discount Rs 30
25 Received Rs. 1,200 in cash and Rs. 2,000 by a bearer cheque in connection with cash
Sales of Rs. 3,200.
26 Received a cheque from Milindra and deposited the bank for collection RS. 800
27 Deposited into bank Rs. 800
28 Received cheque from Haren and immediately sent it to bank Rs. 1600, allowed him discount
Rs. 40
29 received cheque from Jayesh Rs. 600, allowed his discount Rs. 40.
30 Endorsed the cheque of Jayesh to Pramod, discount received Rs.40 from Pramod
Haren,s cheuqe was discount and by bank.
Received payment of Rs.3, 600 FROM rakesh subject to 10% discounted – one third in cash and rent by
cheque which was deposited in the bank.
Dhanesh deposited Rs. 2.000 in our bank account directly.
Narendra,s cheque was dishonored and returnet .
Bank sent the pass book to us which discount that entries have been made therein for Rs. 2.00 as
bank charges and Rs. 1,200 bank interest.

32. Prepare the Analytical petty Cash Bank of Roshan Ltd. For the month of January, 2010 under the imprest
system. The petty cash limit fixed was Rs. 2.500 and the cashier drawsmony under the petty imprest
petty Cash System as and when the balance available with him is below Rs. 500 the petty Cash
transactions for the month of January are given below. 2010
RS
Jan1 Opening balance 2,500
Paid toward conveyance charges 420
3 Purchased of stationery charges 830
Wages to sweeper 210
5 Paid to ward conveyance charges 620
7 Postage stamps purchased 1,100
9 Wages to sweeper 420
12 Telegram charges paid 95
16 Conveyance charges paid 225
19 Wages to sweeper 400

14
 DEPRECIATION

Illustration1. On 1st January, 2009 a company purchased a machine for Rs. 20,000. On 1st January, 2010
another machine was purchased for Rs. 8,000 and paid Rs. 400 for its fitting in the factory. On 1st July,
2011 purchased a third machine for Rs. 6,000 and a fourth machine for Rs. 10,000 was purchased on 31st
march, 2012.
Prepare Machinery account for four years providing depreciation at the rate of 5% per annum. According to
fixed installment Method. Books are closed on 31st December every year.

Illustration2. On 1st January, 2010, a company purchased a machine for Rs. 82,000 and Rs. 18,000 were
Spent for its installation. Depreciation is charged @ 10% p.a. on straight line method. This Machine was
sold on 30th June 2012 for Rs. 50,000. Prepare Machinery a/c for three years assuming that accounts are
closed on 31st December every year.

Illustration3. On 1st January, 2008 a merchant purchased some furniture costing Rs. 55,000. It is
estimated that its working life is 10 years at the end of which it will fetch Rs. 5,000. Additions are made on
1st January. 2009 and 1st July, 2011 to the value of Rs. 9,500 and Rs. 8,400 (residual value Rs. 500 and Rs.
400 respectively). Show the Furniture Account for the first Four years, if depreciation is written off
according to the straight line method.

Illustration4. A company whose according year is the calendar year purchased on 1st April, 2009
machinery Costing Rs. 30,000. It purchased further machinery on 1st Oct, 2009 costing Rs. 20,000 and on
1st July, 2010 costing Rs. 10,000. On 1st January, 2011 one third of the machinery installed on 1st April,
2009 became obsolete and was sold for Rs. 3,000. Show how machinery account would appear in the
books of the company, it being given that machinery was depreciated by fixed installment at 10% per
annum. What would be the balance of Machinery account on? 1st January, 2012.

Illustration5. On 1st April, 2009 a firm purchased machinery for Rs. 2, 00,000. On 1st October in the
same accounting year, additional machinery costing Rs. 1,00,000 was purchased, on 1st October,2010 the
machinery purchased on 1st April,2010 having become obsolete, was sold off for Rs.90,000.On 1st
October,2011,new machinery was purchased for Rs. 2,50,000 while the machinery purchased on 1st
October,2009 was sold for Rs. 85,000 on the same day.
The firm provides depreciation on its machinery@10% per annum on original cost on 31st March every
year.
Show Machinery Account, Provision for depreciation Account and Depreciation Account for the period of
three accounting years ending 31st March, 2012.

Illustration6. On 1st January,2008 machinery was purchased by X for Rs.50,000 on 1st july,2009,
additions were made to the extent of Rs. 10,000.On 1st April,2010,further additions were made to the
extent of Rs. 6,400.On 30,June,2011, machinery original value of which was Rs. 8,000 on 1st
January,2008,was sold for Rs.6,000. Depreciation is charged @ 10% p.a. on original cost. Show machinery
Account for the years from 2008 to 2011 in the books of X. X closes his books on 31st December.

Illustration7. Kalyani industries depreciate its machinery@ 10 % p.a. on straight line basis. On 1st
April,2011 the balance machinery Account was Rs. 8,50,000(original cost Rs. 12,00,000).on 1st July,2011 a
new machine was purchased for Rs. 25,000.On 31st December,2011 an old machine having written down
value of Rs. 40,000 on 1.4.2011(original cost Rs.60,000)was sold for Rs.30,000.Show the Machinery
Account for the year ended on31st March,2012.

Illustration8. 1st January 2009, a firm purchased machinery for Rs. 20, 000.On 1st July 2010 another
machine was purchased for Rs. 10, 000 and on 1st January, one more machine was purchased for Rs .5,

15
000.The firm depreciates its machinery @ 20 % p.a. on the diminishing balance method. Show machine
account for four years.

Illustration9. A Company purchased a machine for Rs.40, 000 on 1-4-2009. It purchased additional
machinery for Rs. 60,000 on 30-09-2010.On 1st of June 2011,it sold off the machinery which was
purchased on 1-4-2009,for Rs. 22,000 and on the same date purchased another machinery for Rs.75,000.

Assuming that the company closes its books of accounts on 31st of December and it charges depreciation
@ 12% p.a on Reducing Balance Method, Prepare Machinery A/c for 2009, 2010 and 2011.

Illustration10. A Company whose accounting year is the calendar year purchased on 1 st April, 2002,
Machinery costing Rs. 30,000. It purchased further machinery on 1 st, October, 2002 Costing Rs. 20,000 and
on 1st July, 2003 Costing Rs. 10,000. On 1st January,2004 one third of the machinery which was installed on
1st April,2002, became obsolete it was sold for Rs. 3,000. Show how the Machinery Account would appear
in the books of the company, it being given that the machinery was depreciated by the fixed installment
Method at 10% per annum. What will be the balance in Machinery Account on 1 st January, 2005?

Illustration11. A machine was purchased for Rs. 31, 25,000.Its estimated useful life is 5 years and its
estimated salvage value is Rs. 32,000. Prepare machinery A/c for all five years under.
(i).Straight-Line Method (ii) Written-Down Value Method of charging depreciation. Under WDV method
use 60% rate for depreciation.

Illustration12. A Ltd. Purchased on 1-1-2001 a second hand plant for Rs. 30,000 and spend Rs. 20,000 on
its overhauling. On 1-7-2001, additional machinery for Rs. 25,000 was purchased. On 1-7-2003, the plant
purchased on 1-1-2001 became obsolete and was sold for Rs. 10,000. On the same day, new machinery
was purchased at a cost of Rs. 60,000. Depreciation was provided annually on 31 st December @ 15% p.a.
on written down value of assets. However, the company changed the method and adopted original cost
method @ 10% p.a. from 31-12-2003.
Prepare Machinery Account for 5 years from 2001 to 2005.

Illustration13. On 1st January,2009 the balance of machinery account in the books of a company was Rs.
38,000. Its accounts were made up on 31st December, each year and depreciation had been written off at
the rate of 10% p.a. on the written down value. On 1st July, 2009 a new machine was acquired for Rs. 6,960
and on the same date a machine which had casted Rs. 2,000 on 1 st January, 2006 was sold for Rs. 1,500.
Prepare Machinery A/c for the year 2009.

Illustration14. A machine was purchased for Rs. 10,000 on 1 st January,2001, But on 1st January,2003 it
was decided to change the method in favor of Diminishing Balance method, the rate being 12% with effect
from the date of purchase. Depreciation was provided for 2 years@ 10% p.a. on fixed installment method.
Prepare Machinery Account from 2001 to 2003.

Illustration15.On 1st January 2003, a company bought plant and machinery costing Rs. 35,000. It is
estimated that its working life is 10 years at the end of which it will fetch Rs. 5000. Additions are made on
1st January 2004 to the value of Rs. 20,000 (Residual value Rs. 2,000) More additions are made on July 1,
2005 to the value of Rs. 10,000 (Break up value Rs.1,000) The working life of both the additional plant and
machinery is 20 years. Show the plant and Machinery Account for the first four years if depreciation is to
be writing according to Straight Line Method. The accounts are closed on 31 st December every year.

Illustration16.X Ltd. Purchased on January1, 20X1 a second hand plant for Rs. 60,000 and immediately
spent Rs. 40,000 in putting the same in working condition. On July1, 20X1 additional Machinery costing Rs.
40,000 was purchased. On Jnauary1, 20X3 the plant purchased on january1, 20X1 became obsolete and
was sold for 50,000. On July1, 20X3 new machinery was purchased at a cost of Rs. 1, 20,000.The firm
provided depreciation on Straight Line Method at 10% per annum on the original cost of assets. In 20X5,

16
the company decided to provided depreciation on written down value basis at 15% per annum. Show
machinery account for the calendar year 20X1 to 20X5.

Illustration17. On 1st April 2012. Tulsian Ltd. purchases a second-hand machine for Rs. 80,000 and spend
Rs. 20,000 on its cartage repairs and installation .The residual value at the end of its expected usefull life
of 4 year is estimated at Rs. 40,000 Calculate the amount of depreciation according to straight line method
for the first year ending on 31march,2013.

Illustration18. On 1st Jan 2013 Tulsian Ltd. purchases a second-hand machine for Rs .5,00,000 and spent
Rs. 1,00,000 on its cartage repaiddrs and installation calculate the amount of depreciation @ 10% p.a.
according to straight line method for the first year ending on 31 st March,2013.

Illustration19.X Ltd. purchased a second-hand machine for Rs. 5,00,000 and spent Rs. 1,00,000 on its
repairs. Depreciation is to be provided @ 10% p.a. according to straight line method this machine is sold
for Rs .4,50,000.Accounting year is financial year.Calculate the profit or loss on sale of machine in each of
the following alternative cases:
Case (a) If date of purchase is 1.4.2012 and date of sale is 31.3.2015.
Case (b) If date of purchase is 1.4.2012 and date of sale is 30.9.2014.
Case (c) If date of purchase is 1.7.2012 and date of sale is 31.3.2015.
Case (d) If date of purchase is 1.7.2012 and date of sale is 30.9.2014.

Illustration20. On 1st April 2011, Tulsian Ltd. purchased a second-hand machine for Rs. 80.000 and
spent Rs. 20,000 on its cartage, repairs and installation the residual value at the end of its expected useful
life of 4 years is estimated at Rs. 40,000 On 30 th Sept.2012, repairs & renewals amounted to Rs. 2,000 On
30th Sept 2013 this machine is sold for Rs. 50,000 Depreciation is to be provided according to straight line
Method.

Illustration21.On 1st 2011, Tulsian Ltd. purchased a second-hand machine for Rs. 80,000 and spend Rs.
20,000 on its cartage, repairs and installation. The residual value at the end of its expected useful life of 4
year is estimated at Rs 40.000 On 30 th Sept.2012 Repairs & Renewals amounted to Rs. 2,000 On 30 th Sept.
2012 this machine is sold for Rs. 50,000 Depreciation is to be provided according to straight line method..

Illustration22. From the following information of Bharat tulsian Ltd. prepare Machinery Accunt for three
years ending 31st March, 2014.
Method of depreciation: Straight line Rate of depreciation 20% p.a.
Date Transaction
01.04.2011 Purchased a second hand Machinery I for Rs. 80,000
01.04.2011 Spent Rs. 20,000 on its repairs to make it serviceable.
01.10.2011 Purchased a new Machinery II for 2, 00,000.
01.04.2013 Spent Rs. 2,000 on repairs of new Machinery II.
30.09.2013 Sold a Machinery I for Rs. 45,000.
30.09.2013 purchased a new Machinery III for Rs. 3, 00,000.

Illustration23. On April, 2011, Machineries were purchased by X for Rs. 50,000 On Oct 1,2012, additions
were made to the extent of Rs. 10,000 On July 1,2013 further additions were made to the extent of Rs.
6,400 On 30th Sept. 201 one machinery, original value of which was Rs.8,000 on April 1,2011 was sold for
Rs. 6,000 Depreciation is charged at 10% p.a. on original cost.

Illustration24.X Ltd. purchased on 1st April 2011 certain machinery for Rs. 1,94,000 and spent Rs. 6,000
on its erection on 1st Oct 2011 additional machinery costing Rs. 1,00,000 was purchased On 1 st Oct
2013the machinery purchased on 1st April 2011 having become obsolete for Rs. 1,00,000 and on the same
date new machinery was purchased at a cost of Rs. 1,50,000 Depreciation was provided for annually on

17
31st March at the rate of 10% per annum on the original cost of the machinery show the machinery
account for the first three years.

Illustration25. A Transport company purchases 5 truks at Rs. 2, 00,000 each on july 1,2011 the company
writes off depreciation 20% per annum on original cost.
On Jan 1,2014 one of the trucks is involved in an accident and is completely destroyed insurance company
pays Rs. 90,000 in full settlement of the claim On the same day the company purchased a used truck for
Rs. 1,00,000 and spends Rs. 20,000 on its overhauling prepare truck account for the three years ending on
31st March 2013.

Illustration26. X Ltd purchased a second-hand Machinery on April 1, 2011 for Rs. 37,000 and
immediately spent Rs. 2,000 on its repairs and Rs. 1,000 on its erection On Oct 1,2012 it purchased
another machine for Rs. 10,000 and on Oct 1,2013 sold off the forst machine purchased on 1 st April 2011
for Rs. 28,000 on the same date it purchased a machinery for Rs. 25,000 On 1 st Oct 2014 the second
machinery purchased for Rs. 10,0000 was also sold off for Rs. 2,000 Depreciation was provided on the
machinery at a rate of 10%p.a. on the original cost annually on 31 st March.

Illustration27. On 1st April 2011 Tulsian Ltd purchased a second-hand machine for Rs. 80,000 and spent
Rs. 20,000 on its cartage repairs and installation on 30 th Sept 2012 repairs & renewals amounted to Rs.
2,000 On 30th Sept 2013 this machine is sold for Rs. 50,000 Depreciation is to be provided @ p.a.
according to written sown value method.

Illustration28. On 1st January 2012 Tulsian Ltd purchased a second-hand Machine for Rs. 80,000 and
spent Rs. 20,000 on its cartage repairs and installation On 30 th Sept 2012 Repairs & Renewals amounted to
Rs. 2,000 On 30th Sept 2013 this machine is sold for 50,000 Depreciation is to be provided @ 20% p.a.
according to Written Down value Method.

Illustration29. X Ltd. had bought machinery for Rs. 2,00,000 including a boiler worth Rs. 20,000 The
Machinery account had been credited for depreciation on the reducing installment system for the past four
year at the rate of 10% p.a. in the beginning of the fifth year the bolier became useless on account of
damage to some of its vital parts and the damaged bolier is sold for Rs .4,000.

Illustration30. On 1st April 2011 X Ltd. purchased machinery for Rs. 12,000 and on 30 th September 2012
acquire additional machinery at a cost of Rs. 2,000 On 30 June 2013 one of the original machines which
had cost Rs. 2,000 was found to have become obsolete and was sold as scrap for Rs.200 it was replaced
on that date by a new machine costing Rs. 800 Depreciation to be provided @ 15% p.a. on the written
down value.

Illustration31 On April 1,2011 a firm purchased a machinery for Rs. 2,00,000 On 1 st October in the same
accounting year additional machinery costing Rs. 1,00,000 was purchased On 1 st October 2012 the
machinery purchased on 1st April 2011 having become obsolete was sold off for Rs .90,000 on October 1,
2013, new machinery was purchased for Rs. 2,50,000 while the machinery purchased on 1 st October 2011
was sold for Rs. 85,000 on the same day the firm provides depreciation on its machinery @ 10% per
annum on original cost on 31st March every year.

Illustration32. On April 1, 2011 X Ltd. purchased a machinery for Rs. 12, 00,000 On oct 1,2013 a part of
the machinery purchased on April 1,2011 for Rs. 80,000 was sold for Rs. 45,000 and a new machinery at a
cost of Rs. 1,58,000 was purchased and installed on the same date the company has adopted the method
of providing 10% p.a. depreciation on the diminishing balance of the machinery.

Illustration33. Calculate the rate of depreciation under straight line method (SLM) from the following:
Purchased a second-hand machine for Rs. 48,000.
Spent Rs. 12,000 on its cartage repairs and installation.

18
Expected useful life of machine 4 years.
Estimated residual value Rs. 36, 000.

Illustration34. On 1st Jan 2013 Tulsian Ltd. purchased a second –hand machine for Rs. 48,000 and spent
Rs. 12,000 on its cartage repairs and installation the residual value at the end of its expected useful life of
4 years is estimated at Rs. 40,800 Calculate the amount of depreciation according to straight line method
for the first year ending on 31st March 2013.

Illustration35. X bought a machine for Rs. 15, 000 on which he spent Rs. 3,000 for carriage and freight
Rs. 600 for brokerage of the middleman Rs. 2100 for installation and Rs. 300 for an iron pad the machine is
depreciated @ 10 per cent every year on Straight line basis. After three years the machine was sold to Y
for Rs. 18,300 and 300 was paid as commission to the profit or loss on the sale of machine.

Illustration36. On 1st Jan 2011 Tulsian Ltd. purchased a second –hand machine for Rs. 48, 000 and spend
Rs. 12,000 on its cartage repairs and installation the residual value at the end of its expected useful life of
4 years is estimated at Rs. 24,000 On 30th Sept. 20X2 Repairs & Renewals amounted to Rs. 1200 On 30 th
SDept.2012 this machine is sold for Rs. 30,000 Depreciation is to be provided according to Straight line
method.

Illustration37. From the following information of Bharat Tulsian Ltd. prepare machinery Account for three
years ending 31st March 2014.
Method of Deprecation: Straight line Rate of Depreciation 20% p.a.
Date Transaction
01.04.2011 Purchased a second hand machinery I for Rs. 48,000.
01.04.2011 Spent Rs. 12,000 on its repairs to make it serviceable.
01.10.2011 Purchased a new machinery II for Rs. 1,20,000.
01.04.2012 Spent Rs. 1200 on repairs of new machinery II.
30.09.2013 Sold a machinery I for Rs. 27,000.
30.09.2013 Purchased a new machinery III for Rs. 1,80,000.

Illustration38. On Apirl 1,2011 Machineries were purchased by X for Rs. 1,00,000 On Oct 1,2012
additions were made to the extent of Rs. 20,000 On July 1,2013 further additions were made to the extant
of Rs. 12,800.On 30th Sept 2014 one machinery original value of which was Rs. 16,000 on April 1,2011 was
sold for Rs. 12,000 Depreciation is charged at 10%p.a. on original cost.

Illustration39. X Ltd Purchased on 1st April 2011 certain machinery for Rs. 1,16,400 and spent Rs. 3,600
on its erection on 1st Oct. 2011 additional machinery costing Rs. 60,000 was purchased on 1 st Oct. 2013
the machinery purchased on 1st April 2011 having become obsolete was auctioned for Rs. 60,000 and on
the same date new machinery was purchased at a cost of Rs. 90,000 Depreciation was provided for
annually on 31st march at the rate of 10% per annum on the original cost of the machinery show the
machinery account for the first three years.

Illustration40. X Ltd. purchased a second-hand machinery on April 1.2011 for Rs. 74,000 and
immediately spent Rs .4,000 on its repairs and Rs. 2,000 on its erection on Oct a, 2012 it purchased
another machine for Rs. 20,000and on Oct 1, 2013 sold off the first machine purchased on 1 st April 2011
for Rs. 56,000 : on the same date it purchased a machinery for Rs. Rs. 50,000 on 1 st Oct. 2014 the second
machinery purchased for Rs. 20,000 was also sold off for Rs. 4,000 Depreciation was provided on the
machinery at a rate of 10% p.a. on the original cost annually on 31 st March.

Illustration41. X Ltd. Has imported a machine on 1,2011 for Rs. 2,56,000 paid customs duty and freight
Rs. 1,28,000 and incurred erection charges Rs.96,000 another local machinery costing Rs. 1,60,000 was
purchased on April n1,2012 on Oct 1,2013 a portion of the imported machinery (value one third) got out of
order and was sold for Rs. 55,680 Another machinery was purchased to replace the same for Rs. 80,000

19
Depreciation to be calculate at 20% p.a. on original cost basis prepare the machinery account for the first
three year ending 31st March 2014.

Illustration42. On 1st April 2011, tulsian Ltd. purchased a second hand machine for Rs 1,60,000 and
spent Rs 40,000 on its cartage repairs and installation On 30 th Sept. 2012 Repairs & Renewals amounted to
Rs 4,000 On 30th Sep. 2013 this machine is sold for Rs 1,00,000 Depreciation is to be provided @ 20% p.a.
according to written down value method.

Illustration43. On 1 April 2011 machinery was purchased for 40,000 On 1 Oct , 2012 another machine
was purchased for Rs. 20,000 and On 1 April 2013 one more machine was purchased for Rs. 10,000 The
firm depreciates its machinery @ 20% p.a. on the diminishing balance method.

Illustration44. Sugan & Co. purchased on 1 st April 2011 a small machinery for Rs. 40,000 On 1 st Oct. in
the same year additional machinery was purchased costing Rs. 20,000 On 1 st Oct 2013 the plant
purchased on 1st April 2011 having become obsolete is sold for Rs. 32,000 Depreciation is provided at 10%
per annum on the written down value every year the books are closed on 31 st March of every year. Pass
the journal entries for three years.

Illustration45. On 1st April 2011 X Ltd. purchased machinery for Rs. 24,000 and on 30 th September 2012
acquire additional machinery at a cost of Rs. 4,000 On 30tth June 2013 one of the original machine which
had cost of Rs. 400 was found to have become obsolete and was sold as scrap for Rs. 400 it was replaced
on that date by a new machine costing Rs. 1,600 Depreciation to be provided @ 15% p.a. on the written
down value.

Illustration46. On 1st April 2011 X Ltd. purchased a machinery for Rs. 1,16,000 and spent Rs. 4,000 on its
erection. On 1st Oct 2011 an additional machinery costing Rs. 40,000 was purchased On 1 st oct 2013 the
machine purchased on 1st April 2011 was sold for Rs. 57,200 and on the same date a new machine was
purchased at a cost of Rs. 80,000.

20