# Question No 25 Chapter No 12 – D.K Goal 11 Class

Q-25 - CH-12 - D.K Goal +1 Book 2020 - Solution

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/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Aug.2010 To Bank A/c(1,80,000 + 10,20,000) 12,00,000 31st Mar 2011 By Balance C/d 12,00,000 12,00,000 12,00,000 1st Apr.2011 To Balance b/f 12,00,000 31st Mar 2012 By Balance C/d 12,00,000 12,00,000 12,00,000 1st Apr.2012 To Balance b/f 12,00,000 31st Dec.2011 By Provision forDepreciation A/c 32,580 31stDec.2011 To Bank A/c 4,00,000 31st Dec.2011 By Bank A/c (Sale) 1,00,000 31st Dec.2011 By Profit & Loss A/c 47,280 31st Mar 2012 By Balance C/d(3,00,000 + 6,00,000) 14,20,000 16,00,000 16,00,000
 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31st Mar 2011 By Depreciation A/c (12,000 + 68,000) 80,000 31stMar.2011 Balance c/d 80,000 80,000 80,000 31st Apr 2011 By Balance b/d 80,000 31stMar.2012 Balance c/d 1,92,000 31st Mar 2012 By Depreciation A/c (16,800 + 95,200) 1,12,000 1,92,000 1,92,000 31st Jul.2011 To Machinery A/c (75,000 + 85,000 + 66,000) 2,11,000 31st Apr 2012 By Balance b/d 1,92,000 31st Dec.2012 By Depreciation A/c (3 Months) 3,780 1st Apr.2012 To Balance b/f 2,78,800 31st Mar.2012 By 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. 2010 1,80,000 Less: – Amount of Depreciation charged on the year 2010-11 1,80,000 *10%* 8/12 12,000 Amount of Depreciation charged on the year 2011-12 1,68,000 *10%* 12/12 16,800 Amount of Depreciation charged on the year 2012-13 1,51,200 *10%* 3/12 3,780 Book value of the asset as of 1st Jul, 2011 1,47,420 Sale Price of Machinery 1,00,000 Loss on the sale of the asset 47,420

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

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