How do you calculate depreciation under SLM?

Annual Depreciation = (Cost of Asset - Salvage Value) / Estimated Useful Life. The same amount is charged every year.

How do you calculate depreciation under WDV?

Depreciation = Rate × Book Value at the beginning of the year. Book value keeps reducing each year, so depreciation amount decreases over time.

Depreciation, Provisions and Reserves — NCERT Class 11 Accountancy

Exercise Solutions Available

Step-by-step answers for all textbook questions in this chapter

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How to Use These Solutions

These NCERT solutions cover every exercise question from CBSE Class 11 Accountancy Chapter 6 — Depreciation, Provisions and Reserves. For the best results:

1. Attempt each problem on your own before reading the solution 2. Write the formula before substituting values — this earns method marks 3. Compare your journal entries with the given solutions 4. Verify your arithmetic — depreciation calculations cascade across years; one error affects all subsequent years 5. Re-attempt any problem where your answer differs

Key Concepts

Before solving the exercises, review these essentials:

Straight Line Method (SLM): Annual Depreciation = (Cost - Salvage Value) / Useful Life; same amount each year
Written Down Value Method (WDV): Depreciation = Rate x Book Value at start of year; decreasing amount each year
Cost of asset = Purchase price + Freight + Installation + Registration (all expenses to make the asset usable)
Book Value = Cost - Accumulated Depreciation
Provision = Charge against profits (mandatory); for known liability/loss of uncertain amount
Reserve = Appropriation of profits (discretionary); to strengthen financial position
Provision for Doubtful Debts = Debited to P&L A/c; shown as deduction from Debtors on Balance Sheet
Provision for Discount on Debtors = Calculated on good debts (Debtors - Provision for Doubtful Debts)
Journal entries: Depreciation A/c Dr. to Asset A/c; then P&L A/c Dr. to Depreciation A/c

Intext Questions

Question 1: On 1st April 2022, M/s Sharma & Co. purchased a machine for Rs 2,00,000. The estimated useful life is 10 years and the salvage value is Rs 20,000. Calculate depreciation under the Straight Line Method and prepare the Machinery Account for the first three years.

Solution

Annual Depreciation = (2,00,000 - 20,000) / 10 = Rs 18,000 per year

Rate of Depreciation = (18,000 / 2,00,000) x 100 = 9%

Machinery Account (SLM)

Date	Particulars	Debit (Rs)	Date	Particulars	Credit (Rs)
Apr 1, 2022	To Bank A/c	2,00,000	Mar 31, 2023	By Depreciation A/c	18,000
			Mar 31, 2023	By Balance c/d	1,82,000
	Total	2,00,000		Total	2,00,000
Apr 1, 2023	To Balance b/d	1,82,000	Mar 31, 2024	By Depreciation A/c	18,000
			Mar 31, 2024	By Balance c/d	1,64,000
	Total	1,82,000		Total	1,82,000
Apr 1, 2024	To Balance b/d	1,64,000	Mar 31, 2025	By Depreciation A/c	18,000
			Mar 31, 2025	By Balance c/d	1,46,000
	Total	1,64,000		Total	1,64,000
Apr 1, 2025	To Balance b/d	1,46,000

Journal Entries (for each year):

Date	Particulars	Debit Rs	Credit Rs
Apr 1, 2022	Machinery A/c Dr.	2,00,000
	To Bank A/c		2,00,000
	(Being machinery purchased)
Mar 31 (each year)	Depreciation A/c Dr.	18,000
	To Machinery A/c		18,000
	(Being depreciation charged)
Mar 31 (each year)	Profit and Loss A/c Dr.	18,000
	To Depreciation A/c		18,000
	(Being depreciation transferred to P&L A/c)

Question 2: On 1st October 2022, M/s Gupta Traders purchased a machine for Rs 1,50,000. Depreciation is charged at 20% per annum on the Written Down Value method. Prepare the Machinery Account for three years ending 31st March 2025. Accounts are closed on 31st March each year.

Solution

Since the machine was purchased on 1st October 2022, depreciation for 2022-23 is for only 6 months.

Year 1 (2022-23): 1st Oct 2022 to 31st Mar 2023 = 6 months

Depreciation = 20% x 1,50,000 x (6/12) = Rs 15,000 Closing Balance = 1,50,000 - 15,000 = Rs 1,35,000

Year 2 (2023-24): Full year

Depreciation = 20% x 1,35,000 = Rs 27,000 Closing Balance = 1,35,000 - 27,000 = Rs 1,08,000

Year 3 (2024-25): Full year

Depreciation = 20% x 1,08,000 = Rs 21,600 Closing Balance = 1,08,000 - 21,600 = Rs 86,400

Machinery Account (WDV)

Date	Particulars	Debit (Rs)	Date	Particulars	Credit (Rs)
Oct 1, 2022	To Bank A/c	1,50,000	Mar 31, 2023	By Depreciation A/c	15,000
			Mar 31, 2023	By Balance c/d	1,35,000
	Total	1,50,000		Total	1,50,000
Apr 1, 2023	To Balance b/d	1,35,000	Mar 31, 2024	By Depreciation A/c	27,000
			Mar 31, 2024	By Balance c/d	1,08,000
	Total	1,35,000		Total	1,35,000
Apr 1, 2024	To Balance b/d	1,08,000	Mar 31, 2025	By Depreciation A/c	21,600
			Mar 31, 2025	By Balance c/d	86,400
	Total	1,08,000		Total	1,08,000
Apr 1, 2025	To Balance b/d	86,400

Chapter-End Exercise

Exercise 1: On 1st January 2023, M/s Ravi Brothers purchased a second-hand machine for Rs 80,000 and spent Rs 10,000 on its overhaul and Rs 5,000 on its installation. Depreciation is provided at 10% per annum on the Straight Line Method. The accounts are closed on 31st December each year. Show the Machinery Account for three years.

Solution

Total Cost = Purchase Price + Overhaul + Installation = 80,000 + 10,000 + 5,000 = Rs 95,000

Annual Depreciation = (95,000 - 0) x 10% = Rs 9,500 (assuming salvage value is zero since not given)

Machinery Account (SLM)

Date	Particulars	Debit (Rs)	Date	Particulars	Credit (Rs)
Jan 1, 2023	To Bank A/c	95,000	Dec 31, 2023	By Depreciation A/c	9,500
			Dec 31, 2023	By Balance c/d	85,500
	Total	95,000		Total	95,000
Jan 1, 2024	To Balance b/d	85,500	Dec 31, 2024	By Depreciation A/c	9,500
			Dec 31, 2024	By Balance c/d	76,000
	Total	85,500		Total	85,500
Jan 1, 2025	To Balance b/d	76,000	Dec 31, 2025	By Depreciation A/c	9,500
			Dec 31, 2025	By Balance c/d	66,500
	Total	76,000		Total	76,000
Jan 1, 2026	To Balance b/d	66,500

Exercise 2: M/s Deepak & Co. purchased a machine on 1st April 2022 for Rs 3,00,000. They charge depreciation at 15% per annum on the WDV method. On 1st October 2024, they purchased another machine for Rs 2,00,000. Prepare the Machinery Account for three years ending 31st March 2025.

Solution

Machine 1 (purchased 1st April 2022, Rs 3,00,000):

Year	Opening Balance	Depreciation (15%)	Closing Balance
2022-23	3,00,000	45,000	2,55,000
2023-24	2,55,000	38,250	2,16,750
2024-25	2,16,750	32,512.50	1,84,237.50

Machine 2 (purchased 1st October 2024, Rs 2,00,000):

Only 6 months depreciation for 2024-25
Depreciation = 15% x 2,00,000 x (6/12) = Rs 15,000
Closing Balance = 2,00,000 - 15,000 = Rs 1,85,000

Machinery Account

Date	Particulars	Debit (Rs)	Date	Particulars	Credit (Rs)
Apr 1, 2022	To Bank A/c (M1)	3,00,000	Mar 31, 2023	By Depreciation A/c	45,000
			Mar 31, 2023	By Balance c/d	2,55,000
	Total	3,00,000		Total	3,00,000
Apr 1, 2023	To Balance b/d	2,55,000	Mar 31, 2024	By Depreciation A/c	38,250
			Mar 31, 2024	By Balance c/d	2,16,750
	Total	2,55,000		Total	2,55,000
Apr 1, 2024	To Balance b/d	2,16,750	Mar 31, 2025	By Depreciation A/c	47,512.50
Oct 1, 2024	To Bank A/c (M2)	2,00,000	Mar 31, 2025	By Balance c/d	3,69,237.50
	Total	4,16,750		Total	4,16,750
Apr 1, 2025	To Balance b/d	3,69,237.50

Note: Total depreciation for 2024-25 = Machine 1 (Rs 32,512.50) + Machine 2 (Rs 15,000) = Rs 47,512.50

Exercise 3: From the following information, calculate the amount of Provision for Doubtful Debts and Provision for Discount on Debtors:

Total Debtors: Rs 80,000
Bad Debts during the year: Rs 5,000 (already written off)
Provision for Doubtful Debts is to be created at 5% on debtors
Provision for Discount on Debtors is to be created at 3% on good debtors

Solution

Step 1: Calculate Provision for Doubtful Debts

Provision for Doubtful Debts = 5% of Rs 80,000 = Rs 4,000

Step 2: Calculate Good Debtors

Good Debtors = Total Debtors - Provision for Doubtful Debts = 80,000 - 4,000 = Rs 76,000

Step 3: Calculate Provision for Discount on Debtors

Provision for Discount on Debtors = 3% of Rs 76,000 = Rs 2,280

Journal Entries:

Particulars	Debit Rs	Credit Rs
Profit and Loss A/c Dr.	4,000
To Provision for Doubtful Debts A/c		4,000
(Being provision for doubtful debts created at 5%)
Profit and Loss A/c Dr.	2,280
To Provision for Discount on Debtors A/c		2,280
(Being provision for discount on debtors created at 3% of good debts)

Balance Sheet Extract:

Particulars	Amount (Rs)
Debtors	80,000
Less: Provision for Doubtful Debts	(4,000)
Good Debtors	76,000
Less: Provision for Discount on Debtors	(2,280)
Net Debtors	73,720

Exercise 4: Distinguish between Provision and Reserve (any five points).

Solution

Basis	Provision	Reserve
1. Nature	Charge against profits	Appropriation of profits
2. Compulsion	Must be created even if there is a loss	Created only when there are profits
3. Purpose	For a known liability/loss of uncertain amount	To strengthen financial position
4. Effect on profit	Reduces net profit	Does not reduce net profit; allocates it
5. Account debited	Profit and Loss Account	Profit and Loss Appropriation Account
6. Dividend	Must be created before deciding dividends	Created after deciding dividends
7. Disclosure	Shown as deduction from asset or as liability	Shown under Reserves and Surplus

Related Resources

[Chapter 6 Guide — Depreciation, Provisions and Reserves](/school/cbse/class/11/accountancy/cbse-depreciation-provisions-reserves)
[All Class 11 Accountancy Solutions](/school/cbse/class/11/accountancy/solutions)
[Class 11 Accountancy Subject Guide](/school/cbse/class/11/accountancy)

Frequently Asked Questions

This page provides complete NCERT solutions for CBSE Class 11 Accountancy Chapter 6 — Depreciation, Provisions and Reserves, with SLM and WDV numericals fully worked out.