Radhika-Masale Amravati purchased a Plant on 1st Jan 2015 for ₹80,000. A new Plant was also purchased for ₹60,000, installation expenses being 10,000 on 1st April 2016. On 1st Jan 2017, a new Plant was purchased for ₹20,000, by disposing-off the 1st Plant at ₹60,000. Prepare Plant Account and depreciation Account for 31st March 2015, 31st March 2016 and 31st March 2017, assuming that the rate of depreciation was @10% on Diminishing Balance Method.

4. Radhika-Masale Amravati purchased a Plant on 1st Jan 2015 for ₹80,000. A new Plant was also purchased for ₹60,000, installation expenses being 410,000 on 1st April 2016. On 1st Jan 2017, a new Plant was purchased for ₹20,000, by disposing-off the 1st Plant at ₹60,000.

Prepare Plant Account and depreciation Account for 31st March 2015, 31st March 2016 and 31st March 2017, assuming that the rate of depreciation was @10% on Diminishing Balance Method. 

Solution:

In the Books of Radhika-Masale Amravati

Plant Account

Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
2015				2015
1st Jan	To Cash/Bank A/c		80,000	31st March	By Depreciation A/c		2,000
				31st march	By Balance c/d		78,000
			80,000				80,000
2015				2016
1st April	To Balance b/d		78,000	31st march	By Depreciation A/c		7,800
				31st march	By balance c/d		70,200
			78,000				78,000

2016				2017
1st April	To Balance b/d		70,200	1st Jan	By depreciation		5,265
1st April	To cash/Bank A/c		70,000	1st Jan	By cash/bank A/c		60,000
2017				31st March	By Depreciation		7,500
1st Jan	To Cash/Bank A/c		20,000
							82,500
			1,60,200				1,60,200

Depreciation Account

Date	Particulars	JF	Amount	Date	Particulars	JF	Amount
2015				2015
31st March	To Plant A/c		2,000	31st Marc	By Profit & Loss		2,000
			2,000				2,000
2016				2016
31st March	To Plant A/c		7,800	31t March	By Profit & Loss A/c		7,800
			7,800				7,800
2017				2017
1st Jan	To Plant A/c		5,265	31st March	By Profit & Loss A/c		12,765
31st March	To Plant A/c		7,500
			12,765				12,765

Calculation & Explanation:

1. 31st march 2015

(M1)

80,000*10%*3/12 = 2,000

2. 31st March 2016

(M1)

78,000*10% = 7,800

3. 1st Jan 2017

(M1)

70,200*10%*9/12 = 5,265

(M2)

70,000*10% = 7,000

(M3)

20,000*10%*3/12 = 500

Depreciation Calculator along with month and percentage