Question

A Plant was purchased on 1^st July, 2015 at a cost of ₹ 3,00,000 and ₹ 50,000 were spent on its installation. The depreciation is written off at 15% p.a. on the straight line method. The plant was sold for ₹ 1,50,000 on October 01, 2017 and on the same date a new Plant was installed at the cost of ₹ 4,00,000 including purchasing value. The accounts are closed on December 31 every year.
Show the machinery account and provision for depreciation account for 3 years.

Answer 1

Dr.	Plant Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2015				2015
July.01	Bank		3,50,000
				Dec.31	Balance c/d		3,50,000
			3,50,000				3,50,000
2016				2016
Jan.01	Balance b/d		3,50,000
				Dec.31	Balance c/d		3,50,000
			3,50,000				3,50,000
2017				2017
Jan.01	Balance b/d		3,50,000	Oct.01	Provision for Depreciation		1,18,125
Oct.01	Bank		4,00,000	Oct.01	Bank		1,50,000
				Oct.01	Profit and Loss		81,875
				Dec.31	Balance c/d		4,00,000
			7,50,000				7,50,000

 

Dr.	Provision for Depreciation Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2015				2015
Dec.31	Balance c/d		26,250	Dec.31	Depreciation		26,250
			26,250				26,250
2016				2016
Dec.31	Balance b/d		78,750	Jan.01	Balance c/d		26,250
				Dec.31	Depreciation		52,500
			78,750				78,750
2017				2017
Oct.01	Plant		1,18,125	Jan.01	Balance b/d		78,750
				Oct.01	Depreciation (i) (9 months)		39,375
Dec.31	Balance c/d		15,000	Dec.31	Depreciation (ii) (3 months)		15,000
			1,33,125				1,33,125