Question No 36 Chapter No 12 – D.K Goal 11 Class

Question No 36 Chapter No 12

Question No 36 Chapter No 12

Free Accounting book Solution - Class 11 and Class 12

36. A limited company purchased on 01-01-2017 a plant for 38,000 and spent 2,000 for carriage and brokerage. On 01-04-2018 it purchased additional plant costing 20,000. On 01-08-2019 the plant purchased on 01-01-2017 was sold for 25,000. On the same date, the plant purchased on 01-04-2018 was sold at a profit of 2,800. Depreciation is provided @10% per annum on diminishing balance method every year. Accounts are closed on 31st December every year. Show the plant A/c for 3 years.

The solution of Question No 36 Chapter No 12: –

Dr. Plant A/c Cr.
Date Particulars
J.F. Amount Date Particulars
J.F. Amount
1st Jan.2017 To Bank A/c(38,000 + 2,000)   40,000 31st Dec 2017 By Deprecation A/c   4,000
        31st Dec2017 By Balance C/d   40,000
      40,000       40,000
1st Jan.2018 To Balance b/f   36,000        
1st Jan.2018 To Bank A/c   20,000 31st Dec2018 By Balance C/d   56,000
      56,000
      56,000
1st Jan 2019 To Balance b/f   50,900 1st Aug 2019 By Deprecation A/c   1,890
1st Aug2019 To Profit & loss A/c   2,800 1st Aug 2019 By Bank A/c   25,000
        1st Aug 2019 By Profit & loss A/c   5,510
        1st Aug 2019 By Deprecation A/c   1,080
        31st Mar 2019
By Balance C/d
  20,220
      53,700       53,700

Working Note:
Calculation of Profit or Loss on Sale M1

Statement Showing the Profit and loss on the sale of Plant
Particulars
Amount
Machinery Purchase on of Equipment as on 1st Jan. 2017 40,000
Less: – Amount of Depreciation charged on the year 2017-18  
40,000 *10%* 12/12 4,000
Amount of Depreciation charged on the year 2018-19  
36,000 *10%* 12/12 3,600
Amount of Depreciation charged on the year 2019-20  
32,400 *10%* 8/12 1,890
Book value of asset as of 1st Oct 2019 30,510
Sale Price of Machinery 25,000
Profit on the sale of the asset 5,510
Statement Showing the Profit and loss on the sale of Plant
Particulars
Amount
Machinery Purchase on of Equipment as on 1stApr. 2018 20,000
Amount of Depreciation charged on the year 2018-19  
36,000 *10%* 12/12 1,500
Amount of Depreciation charged on the year 2019-20  
32,400 *10%* 8/12 1,080
Book value of asset as on 1st Aug, 2019 17,420
Sale Profit on sale 2,800
Sale Value 20,220

Depreciation | Meaning | Methods | Examples

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

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