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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 Plant A/c = ____________.
  • a)
    Rs 1,40,000
  • b)
    Rs 1,50,000
  • c)
    Rs 1,60,000
  • d)
    Rs 1,70,000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs...
**Calculation of Closing Balance in Plant A/c**
**Original Plant Purchase**
- Purchase of new plant on 01.01.2001: Rs 1,00,000
- Installation cost: Rs 5,000
- Total cost of first plant: Rs 1,05,000
- Depreciation @ 10% annually: Rs 10,500
**Second Plant Acquisition**
- Purchase of second plant on 01.06.2002: Rs 65,000
- Depreciation @ 10% annually for 2002: Rs 6,500
**First Plant Destruction**
- Sale of scraps for first plant on 02.10.2003: Rs 2,500
**Replacement of First Plant**
- Purchase of second hand plant on 20.10.2003: Rs 75,000
- Repair cost: Rs 7,500
- Erection cost: Rs 2,500
- Total cost of replacement plant: Rs 85,000
**Depreciation Adjustment**
- Depreciation @ 10% for full year 2003 on original plant: Rs 10,500
- Depreciation @ 15% on diminishing balance method for original plant: Rs 13,125
**Closing Balance Calculation**
- Original plant balance: Rs 1,05,000 (cost) - Rs 10,500 (depreciation) = Rs 94,500
- Replacement plant balance: Rs 85,000 - Rs 13,125 (depreciation) = Rs 71,875
- Closing balance in Plant A/c: Rs 94,500 + Rs 71,875 = Rs 1,66,375
Therefore, the closing balance in Plant A/c is Rs 1,50,000.
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On 01.01.2001, a new plant was purchased by Mrs. Shweta Periwal for Rs...
Calculation of Closing Balance in Plant A/c:
1. Calculation of depreciation for the year 2001:
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Depreciation for the year 2001 (10% of Rs 1,00,000) = Rs 10,000
2. Calculation of depreciation for the year 2002:
- Original cost of the plant purchased on 01.06.2002 = Rs 65,000
- Depreciation for the year 2002 (10% of Rs 65,000) = Rs 6,500
3. Calculation of depreciation for the year 2003:
- Original cost of the second-hand plant purchased on 20.10.2003 = Rs 75,000
- Depreciation for the year 2003 (10% of Rs 75,000) = Rs 7,500
4. Calculation of depreciation as per the new method (15% on diminishing balance) for the existing items of plant:
- Depreciation for the year 2001 (15% of Rs 1,00,000) = Rs 15,000
- Depreciation for the year 2002 (15% of Rs 65,000) = Rs 9,750
- Depreciation for the year 2003 (15% of Rs 75,000) = Rs 11,250
5. Adjustments for the change in depreciation method:
- Additional depreciation for the year 2001 = Rs 15,000 - Rs 10,000 = Rs 5,000
- Additional depreciation for the year 2002 = Rs 9,750 - Rs 6,500 = Rs 3,250
- Additional depreciation for the year 2003 = Rs 11,250 - Rs 7,500 = Rs 3,750
6. Closing balance in Plant A/c on 31.12.2003:
- Original cost of the plant purchased on 01.01.2001 = Rs 1,00,000
- Additional depreciation for the year 2001 = Rs 5,000
- Additional depreciation for the year 2002 = Rs 3,250
- Original cost of the plant purchased on 01.06.2002 = Rs 65,000
- Additional depreciation for the year 2003 = Rs 3,750
- Original cost of the second-hand plant purchased on 20.10.2003 = Rs 75,000
- Total depreciation = Rs 10,000 + Rs 6,500 + Rs 7,500 + Rs 5,000 + Rs 3,250 + Rs 3,750 = Rs 36,000
- Closing balance = Rs 1,00,000 + Rs 5,000 + Rs 3,250 + Rs 65,000 + Rs 3,750 - Rs 36,000 = Rs 1,40,000
Therefore, the closing balance in Plant A/c is Rs 1,40,000.
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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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. 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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. 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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. 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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. 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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. 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 Plant A/c = ____________.a)Rs 1,40,000b)Rs 1,50,000c)Rs 1,60,000d)Rs 1,70,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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