On 1st april, 2010, plant and machinery was purchased for Rs 1,20,000 New machinery was purchased on 1st Oct, - Accountancy - Depreciation Provisions and Reserves

Question

On 1st april, 2010, plant and machinery was purchased for Rs
1,20,000 New machinery was purchased on 1st Oct, 2010, for Rs
50,000 and on 1st july, 2011, for Rs 25,000 On 1st January, 2013, a
machinery of the orignal value of Rs 20,000 whish was included in
the machinery purchased on 1st April,2010, was sold for Rs 6,000
Prepare plant and machinery account for three years after providing
depriciation at 10% p a on straigh line method Accounts are closed
on 31st March every year

Manisha Arora · Accepted Answer

Plant and Machinery
Account

Dr
Cr

Date
Particulars
Amount
(Rs)
Date
Particulars
Amount
(Rs)

2010

2011

Apr 01
Bank A/c (M1)
1,20,000
Mar 31
Depreciation A/c

M1
12,000

M2
2,500
14,500

Oct 01
Bank A/c (M2)
50,000
Mar 31
Balance c/d

M1
1,08,000

M2
47,500
1,55,500

1,70,000

2011

2012

Apr 01
Balance b/d
1,55,500
Mar 31
Depreciation A/c

Jul 01
Bank A/c (M3)
25,000

M1
12,000

M2
5,000

M3(for 9 months)
1,875
18,875

Mar 31
Balance c/d

M1
96,000

M2
42,500

M3
23,125
1,61,625

1,80,500

2012

2013

Apr 01
Balance b/d

Jan 01
Depreciation A/c (on M1 for 9
months)
1,500

M1
96,000

Bank A/c (Sale of
M1)
6,000

M2
42,500

Profit and Loss A/c (Loss on
Sale)
8,500

M3
23,125
1,61,625

Mar 31
Depreciation on-

M1(1,00,000 =
1,20,000-20,00@10%)
10,000

M2
5,000

M3
2,500
17,500

Mar 31
Balance c/d

M1(1,00,00-30,000)
70,000

M2
37,500

M3
20,625
1,28,125

1,61,625

Working
Notes: Calculation of Profit or Loss on
Sale

Particulars
â€‹Amount
â€‹(Rs)

Value of M1 as on Apr 01,
2012
16,000

Less: Depreciation for 9 months
1,500

Value of M1 as on Jan 01,
2013
14,500

Less: Sale Value
6,000

Loss on Sale
8,500

Particulars	Amount (Rs)
Value of M1 as on Apr. 01, 2012	16,000
Less: Depreciation for 9 months	1,500
Value of M1 as on Jan. 01, 2013	14,500
Less: Sale Value	6,000
Loss on Sale	8,500

Plant and Machinery Account
Dr.					Cr.
Date	Particulars		Amount (Rs)	Date		Particulars		Amount (Rs)
2010				2011
Apr.01	Bank A/c (M1)		1,20,000	Mar. 31		Depreciation A/c
						M1	12,000
						M2	2,500	14,500
Oct. 01	Bank A/c (M2)		50,000	Mar. 31		Balance c/d
						M1	1,08,000
						M2	47,500	1,55,500
			1,70,000					1,70,000
2011				2012
Apr.01	Balance b/d		1,55,500	Mar. 31		Depreciation A/c
Jul. 01	Bank A/c (M3)		25,000			M1	12,000
						M2	5,000
						M3(for 9 months)	1,875	18,875
				Mar. 31		Balance c/d
						M1	96,000
						M2	42,500
						M3	23,125	1,61,625
			1,80,500					1,80,500
2012				2013
Apr.01	Balance b/d			Jan. 01		Depreciation A/c (on M1 for 9 months)		1,500
	M1	96,000				Bank A/c (Sale of M1)		6,000
	M2	42,500				Profit and Loss A/c (Loss on Sale)		8,500
	M3	23,125	1,61,625
				Mar. 31		Depreciation on-
						M1(1,00,000 = 1,20,000-20,00@10%)	10,000
						M2	5,000
						M3	2,500	17,500
				Mar. 31		Balance c/d
						M1(1,00,00-30,000)	70,000
						M2	37,500
						M3	20,625	1,28,125
			1,61,625					1,61,625