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On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year?
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On 1st January 2009 a company purchase of plant for 300000 depreciatio...
Depreciation and Sale of Plant
Introduction
In this scenario, a company purchased a plant on 1st January 2009 for a cost of 300,000. The company charges depreciation at a rate of 20% per annum. The books of accounts are closed on 31st March every year. On 30th November 2011, the plant is sold for 1 lakh. Let's analyze the depreciation and sale of the plant in detail.
Depreciation Calculation
To calculate the annual depreciation, we need to multiply the original cost of the plant by the depreciation rate. In this case, the depreciation rate is 20% per annum.
Original Cost of Plant: 300,000
Depreciation Rate: 20%
Depreciation for the year 2009:
Depreciation = 300,000 * 20% = 60,000
Depreciation for the year 2010:
Depreciation = 300,000 * 20% = 60,000
Depreciation for the year 2011:
Depreciation = 300,000 * 20% = 60,000
Book Closure Date
The books of accounts are closed on 31st March every year. Therefore, we need to consider the depreciation expense for the year ending on 31st March.
Depreciation for the year 2009: 60,000
Depreciation for the year 2010: 60,000
Depreciation for the year 2011: 60,000
Calculation of Book Value
To calculate the book value of the plant at any given time, we need to deduct the accumulated depreciation from the original cost.
Book Value as on 31st March 2009:
Original Cost - Depreciation for 2009
= 300,000 - 60,000
= 240,000
Book Value as on 31st March 2010:
Original Cost - (Depreciation for 2009 + Depreciation for 2010)
= 300,000 - (60,000 + 60,000)
= 180,000
Book Value as on 31st March 2011:
Original Cost - (Depreciation for 2009 + Depreciation for 2010 + Depreciation for 2011)
= 300,000 - (60,000 + 60,000 + 60,000)
= 120,000
Sale of Plant
On 30th November 2011, the plant is sold for 1 lakh. Since the books of accounts are closed on 31st March, we need to calculate the gain or loss on the sale of the plant.
Book Value as on 31st March 2011: 120,000
Sale Value: 100,000
Loss on Sale of Plant:
Book Value - Sale Value
= 120,000 - 100,000
= 20,000 (Loss)
Conclusion
In conclusion, the plant was purchased for 300,000 on 1st January 2009. Depreciation was charged at a rate of 20% per annum, and the books of accounts were closed on 31st March every year. On
Introduction
In this scenario, a company purchased a plant on 1st January 2009 for a cost of 300,000. The company charges depreciation at a rate of 20% per annum. The books of accounts are closed on 31st March every year. On 30th November 2011, the plant is sold for 1 lakh. Let's analyze the depreciation and sale of the plant in detail.
Depreciation Calculation
To calculate the annual depreciation, we need to multiply the original cost of the plant by the depreciation rate. In this case, the depreciation rate is 20% per annum.
Original Cost of Plant: 300,000
Depreciation Rate: 20%
Depreciation for the year 2009:
Depreciation = 300,000 * 20% = 60,000
Depreciation for the year 2010:
Depreciation = 300,000 * 20% = 60,000
Depreciation for the year 2011:
Depreciation = 300,000 * 20% = 60,000
Book Closure Date
The books of accounts are closed on 31st March every year. Therefore, we need to consider the depreciation expense for the year ending on 31st March.
Depreciation for the year 2009: 60,000
Depreciation for the year 2010: 60,000
Depreciation for the year 2011: 60,000
Calculation of Book Value
To calculate the book value of the plant at any given time, we need to deduct the accumulated depreciation from the original cost.
Book Value as on 31st March 2009:
Original Cost - Depreciation for 2009
= 300,000 - 60,000
= 240,000
Book Value as on 31st March 2010:
Original Cost - (Depreciation for 2009 + Depreciation for 2010)
= 300,000 - (60,000 + 60,000)
= 180,000
Book Value as on 31st March 2011:
Original Cost - (Depreciation for 2009 + Depreciation for 2010 + Depreciation for 2011)
= 300,000 - (60,000 + 60,000 + 60,000)
= 120,000
Sale of Plant
On 30th November 2011, the plant is sold for 1 lakh. Since the books of accounts are closed on 31st March, we need to calculate the gain or loss on the sale of the plant.
Book Value as on 31st March 2011: 120,000
Sale Value: 100,000
Loss on Sale of Plant:
Book Value - Sale Value
= 120,000 - 100,000
= 20,000 (Loss)
Conclusion
In conclusion, the plant was purchased for 300,000 on 1st January 2009. Depreciation was charged at a rate of 20% per annum, and the books of accounts were closed on 31st March every year. On
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On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year?
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On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year?.
On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st January 2009 a company purchase of plant for 300000 depreciation is charged as 20 % per annum and original cost each year on 30 November 2011 the plant is sold for 1 lakh with the plant argument that the book are closed at 31st March every year?.
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