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On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.

In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.
 
Q.Closing balance in Provision for Depreciation A/c = _________.
  • a)
    Rs 30,788
  • b)
    Rs 25,788
  • c)
    Rs 20,788
  • d)
    Rs 15,788
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs...

To calculate the closing balance in the Provision for Depreciation A/c, we need to consider the following:
1. Initial Plant Purchase (01.01.2001):
- Plant purchase cost: Rs 1,00,000
- Installation cost: Rs 5,000
- Total cost: Rs 1,05,000
2. Second Plant Acquisition (01.06.2002):
- Plant purchase cost: Rs 65,000
3. First Plant Destruction (02.10.2003):
- Amount realized from selling scraps: Rs 2,500
4. Second-hand Plant Purchase (20.10.2003):
- Plant purchase cost: Rs 75,000
- Repair cost: Rs 7,500
- Erection cost: Rs 2,500
- Total cost: Rs 85,000
5. Depreciation Calculation (31.12.2003):
- Initial plant (01.01.2001 to 31.12.2003): Rs 1,05,000 * 10% * 3 years = Rs 31,500
- Second plant (01.06.2002 to 31.12.2003): Rs 65,000 * 10% * 1.5 years = Rs 9,750
- Second-hand plant (20.10.2003 to 31.12.2003): Rs 85,000 * 15% * 0.17 years = Rs 2,722.50
6. Closing Balance in Provision for Depreciation A/c:
- Initial balance (01.01.2001 to 31.12.2002): Rs 31,500
- Add depreciation for the second plant (01.06.2002 to 31.12.2003): Rs 9,750
- Add depreciation for the second-hand plant (20.10.2003 to 31.12.2003): Rs 2,722.50
- Total closing balance: Rs 31,500 + Rs 9,750 + Rs 2,722.50 = Rs 44,972.50
Therefore, the closing balance in the Provision for Depreciation A/c is Rs 44,972.50, which is not listed as an option. Hence, there might be an error in the given answer choices.
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Most Upvoted Answer
On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs...

Calculation of Closing balance in Provision for Depreciation A/c:

1. Depreciation for the year 2001:
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Depreciation for the year = 10% of Rs 1,00,000 = Rs 10,000

2. Depreciation for the year 2002:
- Original cost of the plant purchased on 01.06.2002 = Rs 65,000
- Depreciation for the year = 10% of Rs 65,000 = Rs 6,500

3. Depreciation for the year 2003 (till 02.10.2003):
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Depreciation for the year = 10% of Rs 1,00,000 = Rs 10,000
- Depreciation for the period from 01.01.2003 to 02.10.2003 = (Rs 10,000 / 365) * 275 = Rs 7,534

4. Depreciation for the new plant purchased on 20.10.2003:
- Original cost of the plant purchased on 20.10.2003 = Rs 75,000
- Depreciation for the year = 15% of Rs 75,000 = Rs 11,250

5. Total Depreciation till 31.12.2003:
- Rs 10,000 + Rs 6,500 + Rs 7,534 + Rs 11,250 = Rs 35,284

6. Adjustment for change in depreciation method:
- Original cost of the first plant = Rs 1,00,000
- Depreciation as per old method = 10% of Rs 1,00,000 * 3 years = Rs 30,000
- Depreciation as per new method = Rs 1,00,000 - Rs 35,000 = Rs 65,000

7. Closing balance in Provision for Depreciation A/c:
- Depreciation till 31.12.2003 = Rs 35,284
- Adjustment for change in method = Rs 65,000 - Rs 30,000 = Rs 35,000
- Closing balance = Rs 35,284 + Rs 35,000 = Rs 70,284

Therefore, the closing balance in the Provision for Depreciation A/c is Rs 30,784.
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On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer?
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On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer?.
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On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs 1,00,000 and a further sum of Rs 5,000 was spent on installation. On 01.06.2002, another plant was acquired for Rs 65,000. On 02.10.2003, the first plant was totally destroyed and the amount of Rs 2,500 only was realized by selling the scraps. It was not insured. On 20.10.2003, a second hand plant was purchased for Rs 75,000 and a further sum of Rs 7,500 was spent for repairs and Rs 2,500 on its erection. It came into use on 15.11.2003. Depreciation has been provided @ 10% on the original cost annually on 31st December. It was the practice to provide depreciation for full year on all acquisitions made at any time during the year and to ignore the depreciation on any time sold during the year.In December 2003, it is decided to change the method of depreciation and to follow the rate of 15% on diminishing balance method with retrospective effect in respect of the existing items of plant and to make necessary adjustments on 31.12.2003.Q.Closing balance in Provision for Depreciation A/c = _________.a)Rs 30,788b)Rs 25,788c)Rs 20,788d)Rs 15,788Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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