On 1st January 1990, a company purchased a plant for Rs 60,000/-. On 1st July in the same year, it purchased additional plant worth Rs. 18000/- and spends Rs 2000 on its erection, On 1 st July 1992 the plant purchased on 1st Janurary 1990 having become obsolete, is sold off for Rs 27000/-. On 1st October, 1993, fresh plant was purchased for Rs 64000. Depreciation is provided at 10% per annum on original cost on 31st December every year, Sho plant account from 1990 to 1993.
Plant Account | |||||||||||
Dr. | Cr. | ||||||||||
Date | Particulars | Amount Rs | Date | Particulars | Amount Rs | ||||||
1990 | 1990 | ||||||||||
Jan. 01 | Bank A/c (P1) | 60,000 | Dec. 31 | Depreciation on |
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Jul. 01 | Bank A/c (P2) (18,000 + 2,000) | 20,000 |
| P1 | 6,000 |
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| P2 | 1,000 | 7,000 | |||||
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| Dec. 31 | Balance c/d |
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| P1 | 54,000 |
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| P2 | 19,000 | 73,000 | |||||
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| 80,000 |
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| 80,000 | ||||||
1991 |
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| 1991 |
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Jan. 01 | Balance b/d |
| Dec. 31 | Depreciation on |
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| P1 | 54,000 |
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| P1 | 6,000 |
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| P2 | 19,000 | 73,000 |
| P2 | 2,000 | 8,000 | ||||
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| Dec. 31 | Balance c/d |
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| P1 | 48,000 |
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| P2 | 17,000 | 65,000 | |||||
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| 73,000 |
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| 73,000 | ||||||
1992 |
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| 1992 |
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Jan. 01 | Balance b/d |
| Jul. 31 | Bank A/c (Sale) | 27,000 | ||||||
| P1 | 48,000 |
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| Depreciation on P1 (WN) | 3,000 | |||||
| P2 | 17,000 | 65,000 |
| Profit and Loss A/c (Loss) (WN) | 18,000 | |||||
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| Dec. 31 | Depreciation on P2 | 2,000 | ||||||
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| Balance c/d (P2) | 15,000 | ||||||
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| 65,000 |
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| 65,000 | ||||||
1993 |
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| 1993 |
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Jan. 01 | Balance b/d (P2) | 15,000 | Dec.31 | Depreciation on |
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Oct. 01 | Bank A/c (P3) | 64,000 |
| P2 | 2,000 |
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| P3 | 1,600 | 3,600 | |||||
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| Dec. 31 | Balance c/d |
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| P2 | 13,000 |
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| P3 | 62,400 | 75,400 | |||||
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| 79,000 |
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| 79,000 | ||||||
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Working Note:
Calculation of Profit or Loss on Sale of P1
Particulars | Amount (Rs) |
Value of P1 as on 01.01.1992 | 48,000 |
Less: Depreciation (for 6 months) | (3,000) |
Value as on 01.07.1992 | 45,000 |
Less: Sale Value | (27,000) |
Loss on Sale | 18,000 |
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