Question

On 1st September 2011, Gopal Ltd. purchased a plant for ₹ 10,20,000. On 1st July 2012 another plant was purchased for ₹ 6,00,000. The firm writes off depreciation @ 10% p.a. on original cost and its accounts are closed every year on 31st March. On 1st October 2014, a part of the second plant purchased on 1st July 2012 for ₹ 1,80,000 was sold for ₹ 1,10,000. On 1st December 2014, another plant was purchased for ₹ 3,00,000.
Prepare Plant Account, Provision for Depreciation Account and Plant Disposal Account.

Answer 1

Plant Account
Dr.				Cr.
Date	Particulars		Amount (Rs)		Date	Particulars		Amount (Rs)
2011					2012
Sept. 01	Bank A/c (P1)		10,20,000		Mar. 31	Balance c/d		10,20,000
			10,20,000					10,20,000
2012					2013
Apr. 01	Balance b/d		10,20,000		Mar. 31	Balance c/d
July 01	Bank A/c					P 1	10,20,000
	P2	1,80,000				P 2	1,80,000
	P3	4,20,000	6,00,000			P 3	4,20,000	16,20,000
			16,20,000					16,20,000
2013					2014
Apr. 01	Balance b/d				Mar. 31	Balance c/d		16,20,000
	P 1	10,20,000				P 1	10,20,000
	P 2	1,80,000				P 2	1,80,000
	P 3	4,20,000	16,20,000			P 3	4,20,000	16,20,000
			16,20,000					16,20,000
2014					2014
Apr. 01	Balance b/d				Oct. 01	Plant Disposal A/c (P2)		1,80,000
	P 1	10,20,000			2015
	P 2	1,80,000			Mar. 31	Balance c/d
	P 3	4,20,000	16,20,000			P 1	10,20,000
Dec. 01	Bank A/c (M4)		3,00,000			P 3	4,20,000
						P 4	3,00,000	17,40,000
			19,20,000					19,20,000

Plant Disposal A/c
Dr.				Cr.
Date	Particulars	Amount (Rs)	Date		Particulars	Amount (Rs)
2014			2014
Oct. 01	Plant A/c	1,80,000	Oct. 01		Provision for Depreciation A/c	40,500
					Bank A/c (Sale of P2)	1,10,000
					Profit and Loss A/c (Loss on Sale of P2)	29,500
		1,80,000				1,80,000

Provision for Depreciation Account
Dr.			Cr.
Date	Particulars	Amount (Rs)		Date	Particulars		Amount (Rs)
2012				2012
Mar. 31	Balance c/d	59,500		Mar.31	Depreciation A/c (for 7 months)		59,500
		59,500					59,500
2013				2012
Mar. 31	Balance c/d	2,06,500		Apr.01	Balance b/d		59,500
				2013
				Mar.31	Depreciation A/c
					P1	1,02,000
					P2 (for 9 months)	13,500
					P3 (for 9 months)	31,500	1,47,000
		2,06,500					2,06,500
2014				2013
Mar. 31	Balance c/d	3,68,500		Apr.01	Balance b/d		2,06,500
				2014
				Mar.31	Depreciation A/c
					P1	1,02,000
					P2	18,000
					P3	42,000	1,62,000
		3,68,500					3,68,500
2014				2014
Oct.01	Plant Disposal A/c (P2) (13,500 + 18,000 + 9,000)	40,500		Apr.01	Balance b/d		3,68,500
2015				Oct.01	Depreciation A/c (P2) (for 6 months)		9,000
Mar. 31	Balance c/d	4,91,000		2015
				Mar.31	Depreciation A/c
					P1	1,02,000
					P3	42,000
					P4 (for 4 months)	10,000	1,54,000
		5,31,500					5,31,500

Working Note: Calculation of Profit & Loss on Sale of P2

Particulars	Amount
Value of Plant on July 01, 2012	1,80,000
Less: Depreciation @ 10% for 9 months	13,500
Value of Plant on Apr. 01, 2013	1,66,500
Less: Depreciation @ 10%	18,000
Value of Plant on Apr. 01, 2014	1,48,500
Less: Depreciation @ 10% for 6 months	9,000
Value of Plant on Oct. 01, 2014	1,39,500
Less: Sale Value	1,10,000
Loss on Sale	29,500

Note: In order to make easy calculation, plant purchased on July 01, 2012 has been divided into two parts i.e. P2 and P3.

Thus, P2: Rs 1,80,000 (sold for Rs 1,10,000 on Oct. 01, 2014)

P3: Rs 4,20,000