Question

A Plant was purchased on 1st July, 2015 at a cost of Rs 3,00,000 and Rs 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 Rs 1,50,000 on October 01, 2017 and on the same date a new Plant was installed at the cost of Rs 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

Step-by-step explanation:

Here's the machinery account and provision for depreciation account for the 3 years:

Machinery Account:

2015

July 1 Dr. To Bank 3,00,000

Cr. To Plant 3,00,000

October 1 Dr. To Plant 50,000

Cr. To Cash 50,000

2016

December 31 Dr. To Provision for Depreciation 45,000

Cr. To Plant 45,000

2017

October 1 Dr. To Cash 1,50,000

Cr. To Plant 1,50,000

October 1 Dr. To Bank 4,00,000

Cr. To Plant 4,00,000

December 31 Dr. To Provision for Depreciation 60,000

Cr. To Plant 60,000

2018

December 31 Dr. To Provision for Depreciation 60,000

Cr. To Plant 60,000

Provision for Depreciation Account:

2015

December 31 Dr. To Provision for Depreciation 45,000

Cr. To Depreciation Expense 45,000

2016

December 31 Dr. To Provision for Depreciation 45,000

Cr. To Depreciation Expense 45,000

2017

December 31 Dr. To Provision for Depreciation 60,000

Cr. To Depreciation Expense 60,000

2018

December 31 Dr. To Provision for Depreciation 60,000

Cr. To Depreciation Expense 60,000