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A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.?
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A company purchased a second hand plant for Rs. 30,000. It immediately...
Overview of Plant A/c
To record the transactions related to the plant, we need to prepare a Plant Account. The original cost of the plant includes the purchase price and any additional expenses incurred to make it operational.
Initial Cost and Expenses
- Purchase Price: Rs. 30,000
- Additional Expenses: Rs. 5,000
- Total Cost of Plant: Rs. 30,000 + Rs. 5,000 = Rs. 35,000
Depreciation Calculation
- Depreciation Rate: 10% of original cost
- Depreciation per year: 10% of Rs. 30,000 = Rs. 3,000
Depreciation Schedule
- Year 1 (2015): Rs. 3,000
- Year 2 (2016): Rs. 3,000
- Year 3 (2017): Rs. 3,000
- Year 4 (2018): Rs. 3,000
- Year 5 (2019): Rs. 3,000
- Year 6 (2020): Rs. 3,000
Total Depreciation Over 6 Years
- Total Depreciation: 6 years × Rs. 3,000 = Rs. 18,000
Book Value at Sale
- Book Value at End of Year 6:
- Original Cost: Rs. 30,000
- Total Depreciation: Rs. 18,000
- Book Value: Rs. 30,000 - Rs. 18,000 = Rs. 12,000
Sale of Plant
- Sale Price: Rs. 15,000
- Profit on Sale: Rs. 15,000 - Rs. 12,000 = Rs. 3,000
Plant A/c Summary
plaintext
Date | Particulars | Debit (Rs.) | Credit (Rs.)
-------------------------------------------------------------
1-1-2015 | To Bank (Purchase) | 30,000 |
1-1-2015 | To Bank (Expenses) | 5,000 |
31-12-2015 | By Depreciation A/c | | 3,000
31-12-2016 | By Depreciation A/c | | 3,000
31-12-2017 | By Depreciation A/c | | 3,000
31-12-2018 | By Depreciation A/c | | 3,000
31-12-2019 | By Depreciation A/c | | 3,000
31-12-2020 | By Depreciation A/c | | 3,000
1-1-2021 | By Bank (Sale) | | 15,000
This summary captures the entire transaction history of the plant over six years.
To record the transactions related to the plant, we need to prepare a Plant Account. The original cost of the plant includes the purchase price and any additional expenses incurred to make it operational.
Initial Cost and Expenses
- Purchase Price: Rs. 30,000
- Additional Expenses: Rs. 5,000
- Total Cost of Plant: Rs. 30,000 + Rs. 5,000 = Rs. 35,000
Depreciation Calculation
- Depreciation Rate: 10% of original cost
- Depreciation per year: 10% of Rs. 30,000 = Rs. 3,000
Depreciation Schedule
- Year 1 (2015): Rs. 3,000
- Year 2 (2016): Rs. 3,000
- Year 3 (2017): Rs. 3,000
- Year 4 (2018): Rs. 3,000
- Year 5 (2019): Rs. 3,000
- Year 6 (2020): Rs. 3,000
Total Depreciation Over 6 Years
- Total Depreciation: 6 years × Rs. 3,000 = Rs. 18,000
Book Value at Sale
- Book Value at End of Year 6:
- Original Cost: Rs. 30,000
- Total Depreciation: Rs. 18,000
- Book Value: Rs. 30,000 - Rs. 18,000 = Rs. 12,000
Sale of Plant
- Sale Price: Rs. 15,000
- Profit on Sale: Rs. 15,000 - Rs. 12,000 = Rs. 3,000
Plant A/c Summary
plaintext
Date | Particulars | Debit (Rs.) | Credit (Rs.)
-------------------------------------------------------------
1-1-2015 | To Bank (Purchase) | 30,000 |
1-1-2015 | To Bank (Expenses) | 5,000 |
31-12-2015 | By Depreciation A/c | | 3,000
31-12-2016 | By Depreciation A/c | | 3,000
31-12-2017 | By Depreciation A/c | | 3,000
31-12-2018 | By Depreciation A/c | | 3,000
31-12-2019 | By Depreciation A/c | | 3,000
31-12-2020 | By Depreciation A/c | | 3,000
1-1-2021 | By Bank (Sale) | | 15,000
This summary captures the entire transaction history of the plant over six years.
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A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.?
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A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.?.
A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company purchased a second hand plant for Rs. 30,000. It immediately spent on it Rs. 5,000. The plant was put to use on 1-1-2015. After having used it for six years, in was sold for Rs. 15,000. Your are required to prepare the Plant A/c for 6 years, providing depreciation at 10% on original cost.?.
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