Question

Sushma Ltd. purchased a plant on 1st April, 2015 for 32,40,000. It bought another
plant on 1st July, 2016 for 71,60,000. On 1st January, 2018, plant bought on 1st April,
2015 was sold for 1,60,000 and a fresh plant was purchased on the same date.
Payment of this plant will be made as under :
1st January, 2018
340,000
1st January, 2019
348,000
1st January, 2020
344,000
Payment made in 2019 and 2020 include interest of 38,000 and 34,000
respectively. Depreciation is charged at 10% p.a. on the diminishing balance method.
Show the plant account for three years ended 31st March, 2016 to 31st March,
2018
olli 2019​

Answer 1

Answer:

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Answer 2

For the year ended 31-Mar-2016:

Depreciation = 10% of 32,40,000 = 3,24,000

For the year ended 31-Mar-2017:

Depreciation = 10% of (32,40,000 - 3,24,000) + 10% of 71,60,000 = 5,59,400

For the year ended 31-Mar-2018:

Depreciation = 10% of (62,16,000 - 5,59,400) + 10% of 71,60,000 - 1,60,000 = 8,56,560

To find:

Plant account for  3 years

Given:

1st April, 2015 for 32,40,000. It bought another

plant on 1st July, 2016 for 71,60,000. On 1st January, 2018, plant bought on 1st April,

2015 was sold for 1,60,000 and a fresh plant was purchased on the same date.

Payment of this plant will be made as under :

1st January, 2018

340,000

1st January, 2019

348,000

1st January, 2020

344,000

Payment made in 2019 and 2020 include interest of 38,000 and 34,000

Depreciation is charged at 10% p.a. on the diminishing

Solution:

Plant Account

Particulars 31-Mar-2016 31-Mar-2017 31-Mar-2018

To Balance b/d 32,40,000 62,16,000 72,24,000

To Purchase of Plant 0 0 71,60,000

32,40,000 62,16,000 1,43,84,000

By Sale of Plant 0 0 1,60,000

By Depreciation 3,24,000 5,59,400 8,56,560

By Balance c/d 62,16,000 72,24,000 1,34,67,440

65,40,000 77,83,400 1,43,84,000

Calculation of Depreciation:

For the year ended 31-Mar-2016:

Depreciation = 10% of 32,40,000 = 3,24,000

For the year ended 31-Mar-2017:

Depreciation = 10% of (32,40,000 - 3,24,000) + 10% of 71,60,000 = 5,59,400

For the year ended 31-Mar-2018:

Depreciation = 10% of (62,16,000 - 5,59,400) + 10% of 71,60,000 - 1,60,000 = 8,56,560

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