Question

Accounting
6. (Change of Method from WDV to SLM) Deva Ltd. charged depreciation on its plant and machinery @
10% per annum on the diminishing balance method. On 31 March, 2019, the company decided to adopt
straight line method of charging depreciation with prospective effect as per AS-10. At the time of change
of charging method of depreciation, it was decided by management to review the useful life of Machines
and after review, it was found that old machine is expected to run for a further period of 5 years with
scrap value of 5,990, while new is expected to work for 10 years. On 1 April, 2018, the plant and
machinery account stood in the books at 2,91,600. On 1 July, 2018 a sum of 65,000 was realised by
selling a machine cost of which on 1 April, 2016 was 90,000. On 1 January, 2019, a new machine was
acquired at a cost of 1,50,000.
Show the plant and machinery account in the books of company for the year ending 31 March, 2020.
[Ans. Loss on sale - 1,970; Depreciation (31.3.2020) 47,750 (44,000 + 3,750); Balance in Machinery
Account
3.28.240:1​

Answer 1

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Answer 2

Answer:

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