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The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021?
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The balance of machinery Account of a firm on 1st April 2020 was rs. 2...
Calculation of Depreciation for the Year Ended 31st March 2021
Sale of Plant
- Book value of plant sold on 1st July 2020 = Rs. 216,000
- Sale price of plant = Rs. 82,000
- Loss on sale of plant = Book value - Sale price = Rs. 134,000
Purchase of New Plant
- Cost of new plant = Rs. 458,000
- Cost of erection = Rs. 22,000
- Total cost of new plant = Rs. 480,000
Purchase of New Machine
- Cost of new machine = Rs. 560,000
Depreciation Calculation
- Depreciation rate = 15% per annum under the diminishing balance method
- Depreciation for the year ended 31st March 2021 = [(Book value of machinery on 1st April 2020 - Loss on sale of plant + Cost of new plant + Cost of new machine) x Depreciation rate]/12 months
- Book value of machinery on 1st April 2020 = Rs. 2,854,000 - Rs. 216,000 = Rs. 2,638,000
- Depreciation for the year ended 31st March 2021 = [(2,638,000 - 134,000 + 480,000 + 560,000) x 15%]/12 = Rs. 189,150
Explanation
- The balance of machinery account on 1st April 2020 is given as Rs. 2,854,000, out of which the book value of the plant sold on 1st July 2020 is Rs. 216,000.
- The sale price of the plant is given as Rs. 82,000, which results in a loss on sale of Rs. 134,000.
- A new plant was purchased for Rs. 458,000, and Rs. 22,000 was spent on its erection.
- A new machine was purchased for Rs. 560,000.
- The depreciation rate is given as 15% per annum under the diminishing balance method.
- The depreciation for the year ended 31st March 2021 is calculated by subtracting the loss on sale of plant from the book value of machinery on 1st April 2020 and adding the cost of new plant and new machine. This value is then multiplied by the depreciation rate and divided by 12 months.
- The depreciation for the year ended 31st March 2021 is calculated as Rs. 189,150.
Sale of Plant
- Book value of plant sold on 1st July 2020 = Rs. 216,000
- Sale price of plant = Rs. 82,000
- Loss on sale of plant = Book value - Sale price = Rs. 134,000
Purchase of New Plant
- Cost of new plant = Rs. 458,000
- Cost of erection = Rs. 22,000
- Total cost of new plant = Rs. 480,000
Purchase of New Machine
- Cost of new machine = Rs. 560,000
Depreciation Calculation
- Depreciation rate = 15% per annum under the diminishing balance method
- Depreciation for the year ended 31st March 2021 = [(Book value of machinery on 1st April 2020 - Loss on sale of plant + Cost of new plant + Cost of new machine) x Depreciation rate]/12 months
- Book value of machinery on 1st April 2020 = Rs. 2,854,000 - Rs. 216,000 = Rs. 2,638,000
- Depreciation for the year ended 31st March 2021 = [(2,638,000 - 134,000 + 480,000 + 560,000) x 15%]/12 = Rs. 189,150
Explanation
- The balance of machinery account on 1st April 2020 is given as Rs. 2,854,000, out of which the book value of the plant sold on 1st July 2020 is Rs. 216,000.
- The sale price of the plant is given as Rs. 82,000, which results in a loss on sale of Rs. 134,000.
- A new plant was purchased for Rs. 458,000, and Rs. 22,000 was spent on its erection.
- A new machine was purchased for Rs. 560,000.
- The depreciation rate is given as 15% per annum under the diminishing balance method.
- The depreciation for the year ended 31st March 2021 is calculated by subtracting the loss on sale of plant from the book value of machinery on 1st April 2020 and adding the cost of new plant and new machine. This value is then multiplied by the depreciation rate and divided by 12 months.
- The depreciation for the year ended 31st March 2021 is calculated as Rs. 189,150.
Community Answer
The balance of machinery Account of a firm on 1st April 2020 was rs. 2...
M1 = 2,16,090
Dep = 216090 × 15% × 3/12 = 8103
M2 = 4,58,000 + 22,000
Dep = 480000 × 15% × 9/12 = 54,000
M3 = 5,60,000
Dep = 5,60,000 × 15% × 5/12 = 35,000
M4 = 28,54,000- 2,16,090
Dep = 26,37,910 × 15% = 3,95,686
Total depreciation = M1 + M2 + M3 + M4 =
4,92,789.
Dep = 216090 × 15% × 3/12 = 8103
M2 = 4,58,000 + 22,000
Dep = 480000 × 15% × 9/12 = 54,000
M3 = 5,60,000
Dep = 5,60,000 × 15% × 5/12 = 35,000
M4 = 28,54,000- 2,16,090
Dep = 26,37,910 × 15% = 3,95,686
Total depreciation = M1 + M2 + M3 + M4 =
4,92,789.
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The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021?
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The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021? 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 The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021?.
The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021? 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 The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The balance of machinery Account of a firm on 1st April 2020 was rs. 2854000 out of this a plant having a book value rs. 216000as on 1st April 2020 was sold on 1st July 2020 for rs. 82000 on the same rate a new pant was purchased for rs. 458000and rs. 22000was spent on its erection on 1st Nov. 2020 a new machine was purchased for rs. 560000 Depreciation is written off @15%per annum under the diminishing balance method calculate the depreciation for the year ended 31st March 2021?.
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