Ramesh Ltd. purchased a Plant on 1st April, 2005 for Rs.15,000. It purchased another plant on 1st October, 2005 costing Rs.20,000 and on 1st July, 2006 costing Rs.30,000. On 1st January, 2007 the Plant purchased on 1st April, 2005 became useless and was sold for Rs.2,000. Show Plant Account charging 10% p.a. depreciation by fixed instalment method for four years. The plant purchased on 1st October, 2005 was sold for Rs.8,000 on 1st January, 2008. Accounts of the company are closed on 31st December each year.

Asked by Topperlearning User | 1st Jul, 2016, 03:14: PM

Expert Answer:

 Plant Account

Answered by  | 1st Jul, 2016, 05:14: PM

Dr.

 

 

 

 

Cr.

Date

Particulars

Rs. 

Date

Particulars

Rs. 

2005

 

 

2005

 

 

Apr. 1

To Bank A/c

(Machine I)

15,000

Dec.31

By Depreciation A/c

@10% Plant I (9mths)-1125

@10% Plant II (3mths)- 500

 

 

1,625

Oct .1

To Bank A/c

(Machine II)

20,000

Dec.31

By Balance c/d

Machine I (15000-1125) - 13,875

Machine II (20000-500) - 19,500

 

 

33,375

 

 

35,000

 

 

35,000

2006

 

 

2006

 

 

Jan.1

To Balance b/d

Machine I- 13,875

Machine II- 19500

 

 

 

33,375

Dec. 31

By Depreciation A/c

@10% Plant I (12mths)-1500

@10% Plant II (12mths)- 2000

@10% Plant III (6mths)- 1500

 

 

 

5,000

July 1

To Bank A/c

(Machine III)

30,000

Dec. 31

By Balance c/d

Machine I (13,875-1,500) - 12,375

Machine II (19,500-2,000) - 17,500

Machine III (30,000-1,500) - 28,500

 

58,375

 

 

63,375

 

 

63,375

2007

 

 

2007

 

 

Jan. 1

To Balance b/d

Machine I- 12,375

Machine II- 17,500

Machine III- 28,500

58,375

Jan. 1

By Bank A/c (Sale)

2,000

 

 

 

Jan. 1

By P/L A/c (Loss on sale)

10,375

 

 

 

Dec. 31

By Depreciation A/c

@10% Plant II (12mths)- 2000

@10% Plant III (12mths)- 3000

5,000

 

 

 

 

By Balance c/d

Machine II (17,500-2,000) - 15,500

Machine III (28,500-3,000) - 25,500

41,000

 

 

58,375

 

 

58,375

2008

 

 

2008

 

 

Jan. 1

To Balance b/d

Machine II- 15,500

Machine III- 25,500

41,000

Jan. 1

By Bank A/c (Sale)

8,000

 

 

 

Jan. 1

By P/L A/c (Loss on sale)

7,500

 

 

 

Dec. 31