On Jan 01, 2001 Jain & Sons purchased a second hand plant costing Rs. 00, 000 and spent Rs. 10,000 on its overhauling. It also spent Rs. 5,000 on transportation and installation of the plant. It was decided to provide for depreciation @ of 20%. The plant was sold for 50,000.. Prepare plant account under Straight and Diminishing methods and assume that the Company AA closes its books on December 31, every year .
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⇒ 70,000 + 5,90,000 - 60,000
⇒ 6,00,000
Cost of Good Sold = 6,00,000
Gross Profit = Net Sales - Cost of Good Sold
⇒ Gross Profit = 7,20,000 - 6,00,000
⇒ 1,20,000
Gross Profit =1,20,000
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