Provision for Depreciation Calculation

Given information:
- Balance as on 1.4.2013: Plant and Machinery Rs. 140,000
- Provision for Depreciation (accumulated) as on 1.4.2013: Rs. 30,000
- Rate of Depreciation: 15%

Calculation:
To calculate the provision for depreciation on 31.3.2014, we need to consider the following steps:

Step 1: Calculate the annual depreciation amount
Annual depreciation can be calculated by multiplying the balance of plant and machinery with the rate of depreciation.

Annual Depreciation = Balance of Plant and Machinery * Rate of Depreciation
= Rs. 140,000 * 15%
= Rs. 21,000

Step 2: Calculate the provision for depreciation on 31.3.2014
The provision for depreciation is the accumulated depreciation until the given date. To calculate it, we need to add the annual depreciation to the previous accumulated provision for depreciation.

Provision for Depreciation on 31.3.2014 = Accumulated Provision for Depreciation on 1.4.2013 + Annual Depreciation
= Rs. 30,000 + Rs. 21,000
= Rs. 51,000

Explanation:
Depreciation is the systematic allocation of the cost of an asset over its useful life. It reflects the wear and tear, obsolescence, or decrease in the value of an asset over time. The provision for depreciation is created to account for this decrease in value and is accumulated over the useful life of the asset.

In this case, the plant and machinery had a balance of Rs. 140,000 as of 1.4.2013. The rate of depreciation is given as 15%. Therefore, the annual depreciation amount is calculated as Rs. 21,000 (140,000 * 15%).

The provision for depreciation on 31.3.2014 is calculated by adding the annual depreciation amount to the accumulated provision for depreciation as of 1.4.2013. The accumulated provision for depreciation was Rs. 30,000. By adding the annual depreciation of Rs. 21,000 to it, we get the provision for depreciation on 31.3.2014 as Rs. 51,000.

This provision for depreciation represents the estimated decrease in the value of the plant and machinery over its useful life until 31.3.2014. It is important to regularly calculate and account for depreciation to accurately reflect the true value of the asset in the financial statements.