A Van was purchased on 1st April, 2016 for Rs 60,000 and Rs 5,000 was spent on its repair and registration. On 1st October, 2017 another van was purchased for Rs 70,000. On 1st April, 2018, the first van purchased on 1st April, 2016 was sold for Rs 45,000 and a new van costing Rs 1,70,000 was purchased on the same date. Show the Van Account from 2016-17 to 2018-19 on the basis of Straight Line Method, if the rate of Depreciation charged is 10% p.a. Assume that books are closed on 31st March every year.

Answer

[Balance of Van A/c: Rs 2,12,500 (Van II. Rs 59,500+ Van III: Rs 1,53,000); Loss on Sale of Van- Rs 7,000.]

Explanation

Book Value of Van I (1st April, 2018) Rs 52,000.
Loss on sale of Van = Rs 52,000- Rs 45,000 = Rs 7,000
`{:("Depreciation (2016-17) " ,|"""Depreciation (2018-19)"),("Van I = Rs 65,000"xx10//100= "Rs 6,500","Van II = Rs 70,000"xx10//100= "Rs 7,000"),("Depreciation (2017-18) " ,"Van III = Rs 1,70,000 "xx10//100="Rs 17,000".),("Van I = Rs 65,000"xx10//100= "Rs 6,500" , ),("Van II = Rs 70,000 "xx10//100xx6//12= "Rs 3,500", ):}`