On 1st April 2009, a company bought Plant and Machinery costing Rs. 68000. It is estimated that its working life is 10 years, at the end of which it will fetch Rs. 8000. Additions are made on 1st April 2010 to the value of Rs.40000 (residual value Rs.4000) More additions are made on Oct 1, 2011 to the value of Rs. 9800 (break up value Rs. 800) The working life of   both the additional plant and machinery is 20 years. 
Show the plant and machinery account for the first four year, if depreciation is written off according to straight line methods, the accounts are closed on 31st March every year                                                                   (Balance of machinery account Rs. 87725)

Dear Student,

Please find the Plant & Machinery account below:
Plant & Machinery Account           
Dr. Cr.
Date Particulars Amount
(Rs)
Date Particulars Amount
(Rs)
2009     2010    
Apr. 01 Bank A/c (M1) 68,000 Mar. 31 Depreciation A/c (M1)(WN.1) 6,000
      Mar. 31 Balance c/d 62,000
    68,000     68,000
2010     2011    
Apr 01 Balance b/d 62,000 Mar. 31 Depreciation A/c  
Apr. 01 Bank A/c (M2) 40,000   M1 6,000  
        M2 (WN.2) 1,800 7,800
      Mar. 31 Balance c/d  
        M1 56,000  
        M2 38,200 94,200
    1,02,000     1,02,000
2011     2012    
Apr. 01 Balance b/d   Mar. 31 Depreciation A/c
MI                                6,000
 
  M1 56000     M2                                1,800
M3 (WN.3)                     225     
 
 
8,025
 
 
Oct.01
M2
 
Bank A/c(M3)
38200
 
  
94,200
 
9,800
Mar.31 Balance c/d
MI                              50,000
M2                              36,400
M3                               9,575
 
 
 
95,575
    1,04,000     1,04,000
           
2012
Apr.01
Balance c/d
MI                 50,000           
M2                36,400           
M3                  9,575              
 
 
 
95,975
2013
March.31
Depreciation A/c
M1                                6,000
M2                                1,800
M3                                   450
 
 
 
 
     8,250
      2013
March.31
 
Balance c/d
M1                              44,000
M2                              34,600
M3                                9,125
 
 
 
 
   87,725
           
    95,575     95,575

WN 1 - Depreciation on M1=(68000-8000)/10=6,000 p.a
WN 2 - Depreciation on M2=(40000-4000)/20=1800 p.a
WN 3 - Dereciation on M3 = (9800-800)/20=450 p.a and for six month =450/2=225

Regards

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