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. A company purchased a second hand plant for Rs. 30,000 and immediately spent Rs. 5,000 on repairs. The plant was put to use on January 1985. After using it for sıx
years it was sold for Rs. 15,000. You are required to prepare the plant A/c for 6 years providing depreciation at 10% on diminishing balance method. Accounts are closed on 31st December.?
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. A company purchased a second hand plant for Rs. 30,000 and immediate...
Purchase Details
The company acquired the second-hand plant for Rs. 30,000 and spent an additional Rs. 5,000 on repairs. Thus, the total cost of the plant is:
- Total Cost = Purchase Price + Repairs
- Total Cost = Rs. 30,000 + Rs. 5,000 = Rs. 35,000
Depreciation Calculation
The plant is depreciated using the diminishing balance method at a rate of 10%. The depreciation for each year is calculated as 10% of the book value at the start of that year.
Plant Account for 6 Years
  • Year 1 (1985)
    • Opening Balance: Rs. 35,000
    • Depreciation: Rs. 3,500 (10% of 35,000)
    • Closing Balance: Rs. 31,500


  • Year 2 (1986)
    • Opening Balance: Rs. 31,500
    • Depreciation: Rs. 3,150 (10% of 31,500)
    • Closing Balance: Rs. 28,350


  • Year 3 (1987)
    • Opening Balance: Rs. 28,350
    • Depreciation: Rs. 2,835 (10% of 28,350)
    • Closing Balance: Rs. 25,515


  • Year 4 (1988)
    • Opening Balance: Rs. 25,515
    • Depreciation: Rs. 2,551.50 (10% of 25,515)
    • Closing Balance: Rs. 22,963.50


  • Year 5 (1989)
    • Opening Balance: Rs. 22,963.50
    • Depreciation: Rs. 2,296.35 (10% of 22,963.50)
    • Closing Balance: Rs. 20,667.15


  • Year 6 (1990)
    • Opening Balance: Rs. 20,667.15
    • Depreciation: Rs. 2,066.71 (10% of 20,667.15)
    • Closing Balance: Rs. 18,600.44




Sale of Plant
After 6 years, the plant is sold for Rs. 15,000. The book value at the end of year
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. A company purchased a second hand plant for Rs. 30,000 and immediately spent Rs. 5,000 on repairs. The plant was put to use on January 1985. After using it for sıxyears it was sold for Rs. 15,000. You are required to prepare the plant A/c for 6 years providing depreciation at 10% on diminishing balance method. Accounts are closed on 31st December.?
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. A company purchased a second hand plant for Rs. 30,000 and immediately spent Rs. 5,000 on repairs. The plant was put to use on January 1985. After using it for sıxyears it was sold for Rs. 15,000. You are required to prepare the plant A/c for 6 years providing depreciation at 10% on diminishing balance method. Accounts are closed on 31st December.? 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 and immediately spent Rs. 5,000 on repairs. The plant was put to use on January 1985. After using it for sıxyears it was sold for Rs. 15,000. You are required to prepare the plant A/c for 6 years providing depreciation at 10% on diminishing balance method. Accounts are closed on 31st December.? 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 and immediately spent Rs. 5,000 on repairs. The plant was put to use on January 1985. After using it for sıxyears it was sold for Rs. 15,000. You are required to prepare the plant A/c for 6 years providing depreciation at 10% on diminishing balance method. Accounts are closed on 31st December.?.
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