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Question No 7 Chapter No 12 - Unimax Class 11
7. It is estimated by a company that it will require an additional sum of ₹ 3,00,000 after four years to replace its existing plant. It created a specific reserve for the replacement of its plant and appropriated ₹ 75,000 to this reserve each year on 31st March. New plant is purchased for ₹ 3,00,000 after four years. Give necessary journal entries and ledger accounts.
| Date | Particulars | L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 1st year | |||||
| Mar.31 | Profit & Loss appropriation A/c | Dr | 75,000 | ||
| To plant replacement reserve A/c | 75,000 | ||||
| (Being amount transferred to reserve a/c) | |||||
| 2nd year | |||||
| Mar.31 | Profit & Loss appropriation A/c | Dr | 75,000 | ||
| To plant replacement reserve A/c | 75,000 | ||||
| (Being amount transferred to reserve a/c) | |||||
| 3rd year | |||||
| Mar.31 | Profit & Loss appropriation A/c | Dr | 75,000 | ||
| To plant replacement reserve A/c | 75,000 | ||||
| (Being amount transferred to reserve a/c) | |||||
| 4th year | |||||
| Mar.31 | Profit & Loss appropriation A/c | Dr | 75,000 | ||
| To plant replacement reserve A/c | 75,000 | ||||
| (Being amount transferred to reserve a/c) | |||||
| Mar.31 | Plant A/c | Dr | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being new plant purchased) | |||||
| Mar.31 | Plant replacement reserve A/c | 3,00,000 | |||
| To General reserve A/c | 3,00,000 | ||||
| (Being balance of plant replacement reserve account transferred to general reserve A/c) | |||||
| Dr. | Plant replacement reserve A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
|---|---|---|---|---|---|---|---|
| 1st year | 1st year | ||||||
| Mar.31 | To Balance c/d | 75,000 | Mar.31 | By p & L A/c | 75,000 | ||
| 75,000 | 75,000 | ||||||
| 2nd year | 2nd year | ||||||
| Mar.31 | To Balance c/d | 1,50,000 | Apr.1 | By Balance b/d | 75,000 | ||
| Mar.31 | By P & L A/c | 75,000 | |||||
| 1,50,000 | 1,50,000 | ||||||
| 3rd year | 3rd year | ||||||
| Mar.31 | To Balance c/d | 2,50,000 | Apri.1 | By Balance b/d | 1,50,000 | ||
| Mar.31 | By P & L A/c | 75,000 | |||||
| 2,50,000 | 2,50,000 | ||||||
| 4th year | 4th year | ||||||
| Mar.31 | To General reserve A/c | 3,00,000 | Apr.1 | By Balance b/d | 2,25,000 | ||
| Mar.31 | By P & L A/c | 75,000 | |||||
| 3,00,000 | 3,00,000 | ||||||
| Dr | Bad debts A/c | Cr | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 4th year | |||||||
| Mar.31 | To Bank A/c | 3,00,000 | |||||
It is all about Question No 7 Chapter 12 of Class 11 unimax, If you have any problem please comment below.
Read out the full article to know the meaning of Depreciation
Provisions and Reserves | Meaning | Methods | Examples
https://tutorstips.com/provision-and-reserve/
Also, Check out the same article in Hindi from the following link
Depreciation | Meaning | Methods | Examples-in Hindi
Also, Check out the solved question of all Chapters: –
Part-I
Students may choose only one part from Part II and Part III
Part-II
Part-III
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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