On 1st January, 2021 X Ltd. Purchased from Y Ltd. a plant costing Rs. 4,00,000 on
installment basis payable as follows:
on 1st January, 2021 Rs. 1,00,000
on 1st July, 2021 Rs. 1,00,000
on 1st January, 2022 Rs. 1,00,000
on 1st January, 2021 Rs. 1,00,000
The company spent Rs. 10,000 on transportation and installation of the plant. It
was decided to provide for Depreciation on the Straight Line Method. Useful life of
the plant was estimated at 5 years. It was also estimated that at the end of the
useful life, realizable value of the plant wuld be Rs. 12,000 (gross) and dismantling
cost of plant, to be paid by company was estimated at Rs. 2,000. The plant was
destroyed by fire on 31st December, 2003 and an insurance claim of Rs. 50,000
was admitted by the insurance company. Prepare the Plant Account and
Accumulated Depreciation Account assuming that the company closes its books on
31st December every year.
Answer this question
×Browse free questions and answers by Chapters
- 1 Introduction to Accounting
- 2 Bank Reconciliation Statement
- 3 Financial Statements I
- 4 Application of Computers in Accounting
- 5 Basic Accounting Terms
- 6 Theory Base of Accounting, Accounting Standards and International Financial Reporting Standards (IFRS)
- 7 Bases of Accounting
- 8 Accounting Equation
- 9 Accounting Procedures - Rules of Debit and Credit
- 10 Origin of Transactions - Source Documents and Preparation of Vouchers
- 11 Journal
- 12 Ledger
- 13 Special Purpose Books I - Cash Book
- 14 Special Purpose Books II - Other Books
- 15 Trial Balance
- 16 Depreciation
- 17 Provisions and Reserves
- 18 Accounting for Bills of Exchange
- 19 Rectification of Errors
- 20 Financial Statements of Sole Proprietorship
- 21 Adjustments in Preparation of Financial Statements
- 22 Accounts from Incomplete Records - Single Entry System
