Question

A plant is purchased for ₹ 60,000 on 1st April, 2009. It is estimated that the residual value of this plant at the end of its working life of 10 years will be ₹ 20,920. Depreciation is to be provided at 10% p.a. on diminishing balance method.
You are required to show the Plant Account for 4 years, assuming that the books are closed on 31st March every year.

Answer 1

Plant Account
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
2009			2010
Apr. 01	Bank A/c	60,000	Mar. 31		Depreciation A/c	6,000
			Mar. 31		Balance c/d	54,000
		60,000				60,000
2010			2011
Apr. 01	Balance b/d	54,000	Mar. 31		Depreciation A/c	5,400
			Mar. 31		Balance c/d	48,600
		54,000				54,000
2011			2012
Apr. 01	Balance b/d	48,600	Mar. 31		Depreciation A/c	4,860
			Mar. 31		Balance c/d	43,740
		48,600				48,600
2012			2013
Apr. 01	Balance b/d	43,740	Mar. 31		Depreciation A/c	4,374
			Mar. 31		Balance c/d	39,366
		43,740				43,740

Note: When deprecation is charged as per written down value method, scrap value of asset is ignored.