Question No 25 Chapter No 12

Question No 25 Chapter No 12

25. On 1st August 2010, Hindustan Toys Ltd. purchased a plant for 12,00,000. The firm writes off depreciation at 10% p.a. on the diminishing balance and the books are closed on 31st March each year. On 1st July 2012, a part of this plant of which the original cost was 1,80,000 was sold for 1,00,000 and on the same date, a new plant was purchased for 4,00,000. Show the Plant Account and Provision for Depreciation Account for three years ending 31st March 2013.

The solution of Question No 25 Chapter No 12: –

Dr.Plant A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
1st Aug.2010To Bank A/c(1,80,000 + 10,20,000) 12,00,000    
    31st Mar 2011By Balance C/d  12,00,000
   12,00,000   12,00,000
1st Apr.2011To Balance b/f 12,00,000    
    31st Mar 2012By Balance C/d
 12,00,000
   12,00,000   12,00,000
1st Apr.2012To Balance b/f 12,00,00031st Dec.2011By Provision for
Depreciation A/c
 32,580
31stDec.2011To Bank A/c 4,00,00031st Dec.2011By Bank A/c (Sale) 1,00,000
    31st Dec.2011By Profit & Loss A/c 47,280
    31st Mar 2012By Balance C/d(3,00,000 + 6,00,000)  14,20,000
   16,00,000   16,00,000
Dr.Provision for Depreciation  A/cCr.
DateParticulars
J.F.AmountDateParticulars
J.F.Amount
    31st Mar 2011By Depreciation A/c (12,000 + 68,000) 80,000
31stMar.2011Balance c/d 80,000    
   80,000   80,000
    31st Apr 2011By Balance b/d 80,000
31stMar.2012Balance c/d 1,92,00031st Mar 2012By Depreciation A/c (16,800 + 95,200) 1,12,000
   1,92,000   1,92,000
31st Jul.2011To Machinery A/c (75,000 + 85,000 + 66,000) 2,11,00031st Apr 2012By Balance b/d 1,92,000
    31st Dec.2012By Depreciation A/c (3 Months) 3,780
1st Apr.2012To Balance b/f 2,78,80031st Mar.2012By Depreciation A/c (85,680 + 30,000) 1,15,680
   3,11,460   3,11,460

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 Aug. 20101,80,000
Less: – Amount of Depreciation charged on the year 2010-11 
1,80,000 *10%* 8/1212,000
Amount of Depreciation charged on the year 2011-12 
1,68,000 *10%* 12/1216,800
Amount of Depreciation charged on the year 2012-13 
1,51,200 *10%* 3/123,780
Book value of the asset as of 1st Jul, 20111,47,420
Sale Price of Machinery 1,00,000
Loss on the sale of the asset47,420

Note: In order to make an easy calculation, the plant purchased on Aug. 01, 2010, has been divided into two parts i.e. P1 and P2.
Thus,
P1: Rs 1,80,000 (sold for Rs 1,00,000 on July 01, 2012)

P2: Rs 10,20,000

Depreciation | Meaning | Methods | Examples

Comment if you have any question.

Also, Check out the solved question of all Chapters: –

D K Goel – New ISC Accountancy -(Class 11 – ICSE)- Solution

Check out the Accountancy Class +1 by D.K. Goal (Arya Publication) from their official Site.

ISC Accounts 11 20 Image min 197x300 - Question No 25 Chapter No 12 - D.K Goal 11 Class
D K Goel accountancy +1 – ISC_Accounts_11_20_ImageQuestion No 42 Chapter No 11 – D.K Goal 11 Class

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