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

 

Jul. 01

Bank A/c (P2) (18,000 + 2,000)

20,000

 

P1

6,000

 

 

 

 

 

P2

1,000

7,000

 

 

 

Dec. 31

Balance c/d

 

 

 

 

 

P1

54,000

 

 

 

 

 

P2

19,000

73,000

 

 

80,000

 

 

80,000

1991

 

 

1991

 

 

Jan. 01

Balance b/d

 

Dec. 31

Depreciation on

 

 

P1

54,000

 

 

P1

6,000

 

 

P2

19,000

73,000

 

P2

2,000

8,000

 

 

 

Dec. 31

Balance c/d

 

 

 

 

 

P1

48,000

 

 

 

 

 

P2

17,000

65,000

 

 

73,000

 

 

73,000

1992

 

 

1992

 

 

Jan. 01

Balance b/d

 

Jul. 31

Bank A/c (Sale)

27,000

 

P1

48,000

 

 

Depreciation on P1 (WN)

3,000

 

P2

17,000

65,000

 

Profit and Loss A/c (Loss) (WN)

18,000

 

 

 

Dec. 31

Depreciation on P2

2,000

 

 

 

 

Balance c/d (P2)

15,000

 

 

65,000

 

 

65,000

1993

 

 

1993

 

 

Jan. 01

Balance b/d (P2)

15,000

Dec.31

Depreciation on

 

Oct. 01

Bank A/c (P3)

64,000

 

P2

2,000

 

 

 

 

 

P3

1,600

3,600

 

 

 

Dec. 31

Balance c/d

 

 

 

 

 

P2

13,000

 

 

 

 

 

P3

62,400

75,400

 

 

79,000

 

 

79,000

 

 

 

 

 

 

            

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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