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A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)?
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A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . ...
**Plant and Machinery Account**
Plant and Machinery Account is a nominal account that is used to record the purchase, sale, and depreciation of machinery. It helps in determining the value of machinery at any given point in time.
**Given Information:**
- Purchase of machinery on 1st January 2018: ₹3,50,000
- Purchase of a new machine on 1st January 2020: ₹95,000
- Installation cost of the new machine: ₹5,000
- Sale of machinery on 31st March 2022: ₹52,500
- Depreciation charged at 15% per annum on a straight-line basis
- Books are closed on 31st March every year
**Calculation of Annual Depreciation:**
The annual depreciation can be calculated using the formula:
Depreciation = (Cost of the asset - Estimated residual value) / Useful life
In this case, the cost of the asset is ₹3,50,000 for the old machinery and ₹1,00,000 (₹95,000 + ₹5,000) for the new machinery. The estimated residual value is zero as the machinery is sold off.
The useful life of the machinery is 5 years.
For the old machinery:
Depreciation = (₹3,50,000 - 0) / 5 = ₹70,000 per year
For the new machinery:
Depreciation = (₹1,00,000 - 0) / 5 = ₹20,000 per year
**Preparation of Plant and Machinery Account:**
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|-------------|---------------------------|------------|-------------|---------------------------|------------|
| 01-01-2018 | To Bank A/c | 3,50,000 | | | |
| | (Being purchase of machine) | | | | |
| 01-01-2020 | To Bank A/c | 1,00,000 | | | |
| | (Being purchase of new machine) | | | | |
| | To Installation A/c | 5,000 | | | |
| | (Being installation cost) | | | | |
| 31-03-2022 | To Machinery Sale A/c | | | | 52,500 |
| | (Being sale of machinery) | | | | |
| | | | | | |
| 01-04-2018 | By Depreciation A/c | 70,000 | 01-04-2020 | By Depreciation A/c | 20,000 |
| | (Being depreciation for the year) | | | (Being depreciation for the year) | |
| 31-03-2019 | By Depreciation A/c | 70,000 | 31-03-2021 | By Depreciation A/c | 20,000 |
| | (Being depreciation for the year) | |
Plant and Machinery Account is a nominal account that is used to record the purchase, sale, and depreciation of machinery. It helps in determining the value of machinery at any given point in time.
**Given Information:**
- Purchase of machinery on 1st January 2018: ₹3,50,000
- Purchase of a new machine on 1st January 2020: ₹95,000
- Installation cost of the new machine: ₹5,000
- Sale of machinery on 31st March 2022: ₹52,500
- Depreciation charged at 15% per annum on a straight-line basis
- Books are closed on 31st March every year
**Calculation of Annual Depreciation:**
The annual depreciation can be calculated using the formula:
Depreciation = (Cost of the asset - Estimated residual value) / Useful life
In this case, the cost of the asset is ₹3,50,000 for the old machinery and ₹1,00,000 (₹95,000 + ₹5,000) for the new machinery. The estimated residual value is zero as the machinery is sold off.
The useful life of the machinery is 5 years.
For the old machinery:
Depreciation = (₹3,50,000 - 0) / 5 = ₹70,000 per year
For the new machinery:
Depreciation = (₹1,00,000 - 0) / 5 = ₹20,000 per year
**Preparation of Plant and Machinery Account:**
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
|-------------|---------------------------|------------|-------------|---------------------------|------------|
| 01-01-2018 | To Bank A/c | 3,50,000 | | | |
| | (Being purchase of machine) | | | | |
| 01-01-2020 | To Bank A/c | 1,00,000 | | | |
| | (Being purchase of new machine) | | | | |
| | To Installation A/c | 5,000 | | | |
| | (Being installation cost) | | | | |
| 31-03-2022 | To Machinery Sale A/c | | | | 52,500 |
| | (Being sale of machinery) | | | | |
| | | | | | |
| 01-04-2018 | By Depreciation A/c | 70,000 | 01-04-2020 | By Depreciation A/c | 20,000 |
| | (Being depreciation for the year) | | | (Being depreciation for the year) | |
| 31-03-2019 | By Depreciation A/c | 70,000 | 31-03-2021 | By Depreciation A/c | 20,000 |
| | (Being depreciation for the year) | |
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A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)?
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A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)?.
A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A trader purchased a machinery worth ₹3, 50,000 on 1st january 2018 . On Ist january 2020 he purchased a new machine for ₹ 95,000 and ₹ 5000 on its installation. On 1st january, 2020 was sold off on 31st march 2022 for ₹ 52500 . Depreciation is charged @15% p.a. an straight line method. Prepare plant and machinery account for 5 years assuming that the books are closed on 31st march every year. (Without GST)?.
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