Question

X Ltd. purchased on April 1, 2008 a second hand plant for 4,00,000 and
immediately spent 80,000 for its overhauling and 20,000 for its installation. On
Oct., 1, 2011 the plant became obsolete and was sold for 2,00,000. Depreciation is
provided at 10% p.a. on original cost method. Accounts are closed each year on 31st
March.
Show the necessary Ledger Accounts assuming that :
(a) “Provision for Depreciation Account is not maintained, and
(b) “Provision for Depreciation Account' is maintained.​

Answer 1

Explanation:

x ltd. purchased on april 1, 2015 a second hand plant for rs.4,00,000 and immediately spent rs.80,000 for its overhaulin...

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Answer 2

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. HOPE THIS HELPS.