Question

X Ltd. purchased a plant on 1st July, 2010 costing ₹ 5,00,000. It purchased another plant on 1st September, 2010 costing ₹ 3,00,000. On 31st December, 2012, the plant purchased on 1st July, 2010 got out of order and was sold for ₹ 2,15,000. Another plant was purchased to replace the same for ₹ 6,00,000. Depreciation is to be provided at 20% p.a. according to Writen Down Value Method. The accounts are closed every year on 31st March.
Show the Plant Account and Provision for Depreciation Account.

Answer 1

Plant Account
Dr.				Cr.
Date	Particulars		Amount (Rs)		Date	Particulars		Amount (Rs)
2010					2011
July 01	Bank A/c (P1)		5,00,000		Mar. 31	Balance c/d
Sept. 01	Bank A/c (P2)		3,00,000			P1	5,00,000
						P2	3,00,000	8,00,000
			8,00,000					8,00,000
2011					2012
Apr. 01	Balance b/d				Mar. 31	Balance c/d
	P1	5,00,000				P1	5,00,000
	P2	3,00,000	8,00,000			P2	3,00,000	8,00,000
			8,00,000					8,00,000
2012					2012
Apr. 01	Balance b/d				Dec. 31	Provision for Depreciation A/c		2,11,000
	P1	5,00,000				Bank A/c (Sale of P1)		2,15,000
	P2	3,00,000	8,00,000			Profit and Loss A/c (Loss on Sale of P1)		74,000
Dec. 31	Bank A/c (P3)		6,00,000		2013
					Mar. 31	Balance c/d
						P2	3,00,000
						P3	6,00,000	9,00,000
			14,00,000					14,00,000

Provision for Depreciation Account
Dr.			Cr.
Date	Particulars	Amount (Rs)		Date	Particulars			Amount (Rs)
2011				2011
Mar. 31	Balance c/d	1,10,000		Mar. 31	Depreciation A/c
					P1 (for 9 months)	75,000
					P2 (for 7 months)	35,000		1,10,000
		1,10,000						1,10,000
2012				2011
Mar. 31	Balance c/d	2,48,000		Apr. 01	Balance b/d			1,10,000
				2012
				Mar. 31	Depreciation A/c
					P1	85,000
					P2	53,000		1,38,000
		2,48,000						2,48,000
2012				2012
Dec. 31	Machinery A/c (75,000 + 85,000 + 66,000)	2,11,000		Apr. 01	Balance b/d			2,48,000
2013				Dec. 31	Depreciation A/c (P1) (for 9 months)			51,000
Mar. 31	Balance c/d	1,60,400		2013
				Mar. 31	Depreciation A/c
					P2		42,400
					P3 (for 3 months)		30,000	72,400
		3,71,400						3,71,400

Working Note: Calculation of Profit & Loss on Sale of P1

Particulars	Amount
Value of Plant on July 01, 2010	5,00,000
Less: Depreciation for 9 months	75,000
Value of Plant on Apr. 01, 2011	4,25,000
Less: Depreciation	85,000
Value of Plant on Apr. 01, 2012	3,40,000
Less: Depreciation for 9 months	51,000
Value of Plant on Dec. 31, 2012	2,89,000
Less: Sale Value	2,15,000
Loss on Sale	74,000