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On 1 july a plant was purchased for 40000. Depreciation was provided at 10 p.a on straight line method .the book were closed as per calendar year on 1-1-2016 it was decided to change the method of depreciation to diminishing balance method right from the date of purchase and charge at 15p.a .on 1-7-2017 the plant was sold or 22000 show the plant account from 2014 to 2017?
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On 1 july a plant was purchased for 40000. Depreciation was provided a...
Plant Account from 2014 to 2017

2014:

  • Plant purchased for 40000

  • Depreciation charged at 10% p.a on straight line method = 4000

  • Plant value at the end of the year = 36000



2015:

  • Depreciation charged at 10% p.a on straight line method = 4000

  • Plant value at the end of the year = 32000



2016:

  • Depreciation charged at 10% p.a on straight line method = 4000

  • Book value of plant at the end of the year = 28000

  • Method of depreciation changed to diminishing balance method at 15% p.a from the date of purchase



2017:

  • Depreciation charged at 15% p.a on diminishing balance method = 4200

  • Book value of plant as on 1-7-2017 = 23800

  • Plant sold for 22000 on 1-7-2017

  • Loss on sale of plant = 1800



Explanation:

  • Plant was purchased for 40000 and depreciation was charged at 10% p.a on straight line method

  • Book value of plant was reduced by 4000 every year and at the end of 2016, book value was 28000

  • From 1-1-2016, the method of depreciation was changed to diminishing balance method at 15% p.a

  • Depreciation charged on the new method is higher than the straight line method, hence book value reduced to 23800 by 1-7-2017

  • Plant was sold for 22000 on 1-7-2017 resulting in a loss of 1800

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On 1 july a plant was purchased for 40000. Depreciation was provided at 10 p.a on straight line method .the book were closed as per calendar year on 1-1-2016 it was decided to change the method of depreciation to diminishing balance method right from the date of purchase and charge at 15p.a .on 1-7-2017 the plant was sold or 22000 show the plant account from 2014 to 2017?
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On 1 july a plant was purchased for 40000. Depreciation was provided at 10 p.a on straight line method .the book were closed as per calendar year on 1-1-2016 it was decided to change the method of depreciation to diminishing balance method right from the date of purchase and charge at 15p.a .on 1-7-2017 the plant was sold or 22000 show the plant account from 2014 to 2017? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about On 1 july a plant was purchased for 40000. Depreciation was provided at 10 p.a on straight line method .the book were closed as per calendar year on 1-1-2016 it was decided to change the method of depreciation to diminishing balance method right from the date of purchase and charge at 15p.a .on 1-7-2017 the plant was sold or 22000 show the plant account from 2014 to 2017? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1 july a plant was purchased for 40000. Depreciation was provided at 10 p.a on straight line method .the book were closed as per calendar year on 1-1-2016 it was decided to change the method of depreciation to diminishing balance method right from the date of purchase and charge at 15p.a .on 1-7-2017 the plant was sold or 22000 show the plant account from 2014 to 2017?.
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