Question

On 1st April, 2010, Plant and Machinery was purchased for Rs1,20,000. New machinery was purchased on 1st Oct., 2010, for Rs.50,000 and on 1st July, 2011, for Rs.25,000.On 1st January, 2013, a machinery of the original value of Rs.20,000 which was included in the machinery purchased on 1st April, 2010, was sold for Rs.6,000. Prepare Plant & Machinery A/c for three years after providing depreciation at 10% p.a. on Straight Line Method. Accounts are closed on 31st March every year.​

Answer 1

Answer:

ANSWER

Depreciation on SLM Basis = 10,000 x 10/100

= RS-1,000.

Depreciation On WDV basis :-

1st year (2005-06)

= 10,000 x 10/100

= RS-1,000.

2nd year (2006-07)

= (10,000 - 1,000) 9,000 x 10/100

= RS-9,00.

Difference in depreciation = Depreciation in SLM - Depreciation in WDV

= 1,000 - 9,00

= RS-100.