Question : From the following information, :
| Particulars | Closing Balance (Rs) | Opening Balance (Rs) |
| Machinery (at cost) | 4,20,000 | 4,00,000 |
| Accumulated depreciation | 1,10,000 | 1,00,000 |
| Patents | 1,60,000 | 2,80,000 |
Additional Information:
1. During the year, a machine costing Rs 40,000 with an accumulated depreciation of Rs 24,000 was sold for Rs 20,000.
2. Patents written off were Rs 40,000 and some patents were sold at a profit of Rs 20,000.
Question:
Value of patents sold ____________.
Option 1: Rs 40,000
Option 2: Rs 60,000
Option 3: Rs 1,00,000
Option 4: None of the above.
Correct Answer: Rs 1,00,000
Solution : Answer = value of the patent sold of Rs 1,00,000
| Machinery A/c | |||
| To Bal c/d | 4,00,000 | By Bank(sale) | 20,000 |
| To Profit & loss A/c(Profit) | 4,000 | By Accumulated dep | 24,000 |
| To Bank(Purchases)(b/f) | 80,000 | By bal c/d | 4,20,000 |
| 4,84,000 | 4,84,000 | ||
| Accumulated dep A/c | |||
| To machinery A/c | 24,000 | By Bal c/d | 1,00,000 |
| To Bal c/d | 1,10,000 | By Profit & loss A/c(b/f) | 34,000 |
| 1,34,000 | 1,34,000 | ||
| C.P | 40,000 |
| Accumulated dep | 24,000 |
| Book value | 16,000 |
| - S.P. | (20,000) |
| Profit | 4,000 |
| Patent a/c | |||
| To Bal c/d | 2,80,000 | By Bank(sale) | 1,00,000(b/f) |
| To Profit & Loss | 20,000 | By Profit & loss(written off) | 40,000 |
| By Bal c/d | 1,60,000 | ||
| 3,00,000 | 3,00,000 | ||
Hence, the correct option is 3.
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