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.?

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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.?

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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.

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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.?.

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