Question

6.A Plant was purchased for 40,000 on 1.1.2015. A new Plant was also purchased for 30,000,installation expenses being 5,000 on 1.4.2015. On 1.1.2016, a new Plant was purchased for* 10,000 by disposing of the Ist Plant at 20,000.Show the Plant Account upto 31.3.2017 assuming the rate of depreciation was @ 10% onDiminishing Balance Method. (Assume the business closes its accounts on 31st March everyyear.)[Ans. Balance of Plant Account 37.125, Loss on Sale of Plant Account 16,0751​

Answer 1

Working note -

1. 40000 o/c

- 1000. dep.

__________________

39000. WDV

- 2925. Dep.

__________________

36675. WDV

- 20000. S/p

__________________

16075. loss on sale

__________________

2. 35000. o/c

- 3500. dep.

__________________

31500. WDV

- 3150. Dep

__________________

28350. WDV

3. 10000. o/c

-250. dep.

__________________

9750. WDV