A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.?

Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity

Open App

CA Foundation Exam > CA Foundation Questions > A company purchased a plant for ₹200000 on 1s...

Join the Discussion on the App

A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.?

Join for Free

Join for Free

Most Upvoted Answer

A company purchased a plant for ₹200000 on 1st april 2016.It further s...

Plant A/c for the year ended 31st March 2017

Particulars Amount (₹) Particulars Amount (₹)
To Bank A/c 200000 By Depreciation A/c 20000
To Installation A/c 10000 By Balance c/d 180000
210000 210000

Plant A/c for the year ended 31st March 2018

Particulars Amount (₹) Particulars Amount (₹)
To Depreciation A/c 20000 By Balance c/d 160000
20000 20000

Plant A/c for the year ended 31st March 2019

Particulars Amount (₹) Particulars Amount (₹)
To Depreciation A/c 16000 By Bank A/c 120000
To Loss on Sale of Plant A/c 28000 By Balance c/d 132000
44000 44000

Explanation:

- The plant was purchased on 1st April 2016 for ₹200000 and installation cost of ₹10000 was incurred. Therefore, the total cost of the plant is ₹210000.
- The plant was brought into use on 1st August 2016. Hence, depreciation will be charged for 8 months in the first year and for 12 months in the subsequent years.
- Depreciation is written off at 10% p.a. on straight line method. Therefore, the annual depreciation will be ₹21000 (10% of ₹210000).
- For the year ended 31st March 2017, the depreciation charged will be for 8 months i.e. ₹14000 (₹21000 x 8/12) and the balance of ₹186000 (₹200000 + ₹10000 - ₹14000) will be carried forward to the next year.
- For the year ended 31st March 2018, the depreciation charged will be ₹21000 and the balance of ₹160000 (₹186000 - ₹21000) will be carried forward to the next year.
- On 31st December 2018, the plant was sold for ₹120000 which is less than its written down value of ₹160000. Hence, a loss of ₹28000 (₹160000 - ₹120000) is incurred.
- For the year ended 31st March 2019, the depreciation charged will be ₹16000 (₹21000 x 8/12) and the loss on sale of plant of ₹28000 will also be charged. The balance of ₹132000 (₹160000 - ₹16000 - ₹28000) will be carried forward to the next year.

Answered by Freedom Institute · View profile

Community Answer

A company purchased a plant for ₹200000 on 1st april 2016.It further s...

Share via Whatsapp

Attention CA Foundation Students!

To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.

Quantitative Aptitude for CA Foundation

Accounting for CA Foundation

Business Laws for CA Foundation

Business Economics for CA Foundation

View all answers Start learning for free

Explore Courses for CA Foundation exam

Similar CA Foundation Doubts

Rajesh purchased a second hand machine for 18000 on 1st april,2010. He spent 2000 on its overhaul and installation. Depreciation is written off at 10 percent per annum on the original cost. On 30th June 2013 the machine was found to be unsuitable and sold for 4000 prepare the Machine account from 2010 to 2013 assuming that the account are closed on 31st December every year. Related: ICAI Notes 5 - Depreciation Accounting (Part - 1)?

View answer

8 A company purchased on Ist July 2003 at a cost of Rs. 14,000 and Rs. 1000 was spend on its installation. The depreciation is written off on 10 %the original cost every year. The books arc closed on 31st December each year. Under straight line method?

View answer

B Limited has been charging depreciation on the straight line method. It charges a full year depreciation even if the machinery is utilized only for part of the year. An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis. Now the company decides to change the method of depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8% p.a. Assuming that before the effect of this change could be accounted, depreciation for the current year is already charged based on straight line method and is reflected in the depreciated value of Rs.2,97,500.Q. If 8% depreciation was charged by the reducing balance method, WDV at the end of 1st year is

View answer

B Limited has been charging depreciation on the straight line method. It charges a full year depreciation even if the machinery is utilized only for part of the year. An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis. Now the company decides to change the method of depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8% p.a. Assuming that before the effect of this change could be accounted, depreciation for the current year is already charged based on straight line method and is reflected in the depreciated value of Rs.2,97,500. The extra depreciation to be provided based on the changed method during the year is

View answer

B Limited has been charging depreciation on the straight line method. It charges a full year depreciation even if the machinery is utilized only for part of the year. An equipment which was purchased for Rs.3,50,000 now stands at Rs.2,97,500 after depreciating at the rate of 5% on a straight line basis. Now the company decides to change the method of depreciation with retrospective effect. The applicable reducing balance rate for this machinery would be 8% p.a. Assuming that before the effect of this change could be accounted, depreciation for the current year is already charged based on straight line method and is reflected in the depreciated value of Rs.2,97,500. Straight line depreciation per annum is

View answer

Top Courses for CA FoundationView all

Quantitative Aptitude for CA Foundation

Accounting for CA Foundation

Business Laws for CA Foundation

Business Economics for CA Foundation

Mock Tests & Past Year Papers for CA Foundation

Top Courses for CA Foundation

View all

Share with a Friend

Answer this doubt

Question Description
A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? 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 A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.?.

Solutions for A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.

Here you can find the meaning of A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? defined & explained in the simplest way possible. Besides giving the explanation of A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.?, a detailed solution for A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? has been provided alongside types of A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? theory, EduRev gives you an ample number of questions to practice A company purchased a plant for ₹200000 on 1st april 2016.It further spent ₹10000 on its installation.It was brought in use from 1st Audust,2016.Depreciation is written off at 10% p.a. on straight line method. On 31st december,2018 the plant sold for ₹ 120000. Prepare the plant a/c assuming that the books are closed on 31st march each year.? tests, examples and also practice CA Foundation tests.

Explore Courses for CA Foundation exam