Question No 24 Chapter No 12

24. X Ltd. purchased a plant on 1st July 2010 costing 5,00,000. It purchased another plant on 1st September 2010 costing 3,00,000. On 31st December 2012, the plant purchased on 1st July 2010 got out of order and was sold for 2,15,000. Another plant was purchased to replace the same for 6,00,000. Depreciation is to be provided at 20% p.a. according to Written Down Value Method. The accounts are closed every year on 31st March.
Show the Plant Account and Provision for Depreciation Account.

## The solution of Question No 24 Chapter No 12: –

 Dr. Plant A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Jul.2010 To Bank A/c(P1) 5,00,000 1st Sep.2010 To Bank A/c(P2) 3,00,000 31st Mar 2011 By Balance C/d 8,00,000 8,00,000 8,00,000 1st Apr.2011 To Balance b/f 8,00,000 31st Mar 2012 By Balance C/d 8,00,000 8,00,000 8,00,000 1st Apr.2012 To Balance b/f 8,00,000 31st Dec.2012 By Provision forDepreciation A/c 2,11,000 31stDec.2012 To Bank A/c 6,00,000 31st Dec.2012 By Bank A/c (Sale) 2,15,000 31st Dec.2012 By Profit & Loss A/c 74,000 31st Mar 2012 By Balance C/d(3,00,000 + 6,00,000) 9,00,000 14,00,000 14,00,000
 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31st Mar 2011 By Depreciation A/c (75,0000 + 35,000) 1,10,000 31stMar.2011 Balance c/d 1,10,000 1,10,000 1,10,000 31st Apr 2011 By Balance b/d 1,10,000 31stMar.2012 Balance c/d 2,48,000 31st Mar 2012 By Depreciation A/c (85,000 + 53,000) 1,38,000 2,48,000 2,48,000 31st Jul.2011 To Machinery A/c (75,000 + 85,000 + 66,000) 2,11,000 31st Apr 2012 By Balance b/d 2,02,500 31st Dec.2012 By Depreciation A/c (9 Months) 51,000 1st Apr.2012 To Balance b/f 1,60,400 31st Mar.2012 By Depreciation A/c (60,000 + 42,000) 72,400 3,71,400 3,71,400

Working Note:
Calculation of Profit or Loss on Sale M1

 Statement Showing profit or loss on the sale of Machinery Particulars Amount Machinery Purchase on of Equipment as on 1st Jul. 2010 5,00,000 Less: – Amount of Depreciation charged on the year 2010-11 5,00,000 *20%* 6/12 75,000 Amount of Depreciation charged on the year 2011-12 5,00,000 *20%* 12/12 85,000 Amount of Depreciation charged on the year 2012-13 5,00,000 *20%* 9/12 51,000 Book value of the asset as of 30th Jul 2011 2,89,000 Sale Price of Machinery 2,15,000 Loss on the sale of the asset 74,000

Depreciation | Meaning | Methods | Examples

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