Question

On 1" June 2009, Lakshmi Ltd purchased a plant for Rs.9,00,000. On 1" December 2011 a part of the plant
purchased on 1" June, 2009 for Rs. 1,50,000 was sold for Rs.60,000. On 1st January 2012 a new plant
was purchased for Rs.3,00,000 Depreciation is provided @ 10% on Diminishing Balance method.
Prepare plant Alo and Provision for Depreciation A/e for the relevant years ended 31st March.​

Answer 1

Explanation:

Balance in 'Provision for depreciation Account" as on 31.03.2015:-

= depreciation on unsold machinery + Depreciation on new machinery

= RS- 3,36,000 + RS-4,000

RS-3,40,000.

Working notes:-

1) Depreciation on existing machinery from 1.4.2012 to 31.03.2015 (3 years):-

= (12,00,000 - 80,000) 11,20,000 x 10/100 x 3 years

= RS-3,36,000

2) Depreciation on new machinery from 1.10.2014 to 31.03.2015 (6months)

= 80,000 x 10/100 x 6/12

= RS-4,000.

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