You are given following balances as on 1st April 2014 Plant Machinery A/c 25,00,000 Provision for Depreciation - Accountancy - Depreciation Provisions and Reserves

Question

You are given following balances as on 1st April 2014 Plant
& Machinery A/c 25,00,000 Provision for Depreciation A/c
5,80,000 Depreciation is charged on plant at 20% p a by the
diminishing balance method A piece of machinery purchased on 1st
April, 2012 for 5,00,000 was sold on 1st October, 2014 for 3,00,000
Prepare the Plant & Machinery Account and Provision for
Depreciation Account for the year ended 31st March, 2015 Also
prepare Machinery Disposal Account

Neha Chopra · Accepted Answer

Dear
Student,

Plant & Machinery
A/c

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

01 Apr
2014
Balance
b/d
2,500,000
01 Oct
2014
Machinery disposal
A/c
500,000

31 Mar
2015
Balance
c/d
2,000,000

2,500,000

Provision for
Depreciation A/c

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

01 Oct
2014
Machinery Disposal
A/c
212,000
01 Apr
2014
Balance
b/d
580,000

31 Mar
2015
Balance
c/d
720,000
01 Oct
2014
Depreciation A/c (sold
machine)
32,000

31 Mar
2015
Depreciation
A/c
320,000

932,000

Machinery Disposal
A/c

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

01 Oct
2014
Plant & Machinery
A/c
500,000
01 Oct
2014
Bank
A/c
300,000

Profit on Sale of
Machinery A/c
12,000

Provision for
depreciation A/c
212,000

512,000

Working:
Cost of sold Machinery Rs 5,00,000 as on 01 Apr 2012; Date on which
sold is 01 Oct 2014
so depreciation to be charged @ 20% for 2 5 years on diminishing
balance method =
5,00,000×20100+4,00,000×201003,20,000×20100×612 = 2,12,000
Depreciation on sold machinery for the year 2014 is Rs
32,000

Total depreciation for the year on remaining value of Machinery =
20% of (Cost of Machinery not sold Less depreciation on them till
date) = 20100×20,00,000-4,00,000 = 3,20,000

Keep Posting!!!

Regards,

Plant & Machinery A/c
Date	Particulars	Amount (in Rs)	Date	Particulars	Amount (in Rs)
01 Apr 2014	Balance b/d	2,500,000	01 Oct 2014	Machinery disposal A/c	500,000
			31 Mar 2015	Balance c/d	2,000,000
		2,500,000			2,500,000

Provision for Depreciation A/c
Date	Particulars	Amount (in Rs)	Date	Particulars	Amount (in Rs)
01 Oct 2014	Machinery Disposal A/c	212,000	01 Apr 2014	Balance b/d	580,000
31 Mar 2015	Balance c/d	720,000	01 Oct 2014	Depreciation A/c (sold machine)	32,000
			31 Mar 2015	Depreciation A/c	320,000
		932,000			932,000