Question No 04 Chapter No 12

04. A company purchased a plant for 2,00,000 on 1st April 2016.it further spent 10,000 on its installation.it was brought in use from 1st August 2016 Depreciation is written off at 10% p.a. on straight line method. On 31st December 2018 the plant is sold for 1,20,000. prepare the plant A/c assuming that the books are closed on 31st March each year

## The solution of Question No 04 Chapter No 12: –

 Dr. Machinery A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Aug.2016 To Bank A/c 2,10,000 31stMar2017 By Deprecation A/c 14,000 31stMar2017 By Balance C/d 1,96,000 2,10,000 2,10,000 1st Apr 2017 To Balance b/f 1,96,000 31stMar2018 By Deprecation A/c 21,000 31stMar2018 By Balance C/d 1,75,000 1,96,000 1,96,000 1st Apr.2018 To Balance b/f 1,75,000 31st Dec 2018 By Deprecation A/c 15,750 31st Dec 2018 By Bank A/c 1,20,000 31st Dec 2018 By Profit & Loss A/c 39,250 1,75,000 1,75,000

Working Note:
Calculation of Depreciation

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Plant value of Equipment as of 1st Aug 2016 2,10,000 Amount of Depreciation charged on the year 2016-17 2,10,000 *10%* 8/12 14,000 Amount of Depreciation charged on the year 2017-18 2,10,000 *10%* 12/12 21,000 Amount of Depreciation charged on the year 2018-19 2,10,000 *10%* 9/12 15,750 Book value of asset as on 31st Dec , 2018 1,59,250 Sale Price of Machinery 1,20,000 Loss on the sale of the asset 39,250

Depreciation | Meaning | Methods | Examples

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