Q2.
A firm’s plant and machinery account
at 31st December, 2015 and the corresponding depreciation provision account,
broken down by year of purchase are as follows:
Year
of purchase
|
Plant
and machinery at cost
|
Depreciation provision
|
|
Rs.
|
Rs.
|
1998
|
2,00,000
|
2,00,000
|
2004
|
3,00,000
|
3,00,000
|
2005
|
10,00,000
|
9,50,000
|
2006
|
7,00,000
|
5,95,000
|
2013
|
5,00,000
|
75,000
|
2014
|
3,00,000
|
15,000
|
|
30,00,000
|
21,35,000
|
Depreciation is at the rate of 10%
per annum on cost. It is the Company’s policy to assume that all purchases,
sales or disposal of plant occurred on 30th June in the relevant year for the
purpose of calculating depreciation, irrespective of the precise date on which
these events occurred.
During 2015 the following
transactions took place:
1. Purchase of plant and machinery
amounted to Rs.15,00,000
2. Plant that had been bought in
2004 for Rs.170,000 was scrapped.
3. Plant that had been bought in
2005 for Rs.90,000 was sold for Rs.5,000.
4. Plant that had been bought in
2006 for 2,40,000 was sold for Rs.15,000.
You are required to: Calculate the provision for
depreciation of plant and machinery for the year ended 31st December,2015. In
calculating this provision you should bear in mind that it is the company’s
policy to show any profit or loss on the sale or disposal of plant as a
completely separate item in the Profit and Loss Account. You are also required
to prepare the following ledger accounts during 2015.
(i) Plant and machinery at cost;
(ii) Depreciation provision;
(iii) Sales or disposal of plant and
machinery.
see in detail
Q3.
The Machinery Account of a Factory showed a balance of
Rs.19,00,000 on 1st January, 2015. Its accounts were made up on 31st December
each year and depreciation is written off at 10% p.a. under the Diminishing
Balance Method.
On 1st June 2015, a new machinery was acquired at a cost
of Rs.2,80,000 and installation charges incurred in erecting the machine works
out to Rs.8,920 on the same date. On 1st June, 2015 a machine which had cost
Rs.4,37,400 on 1st January 2013 was sold for Rs.75,000. Another machine which
had cost Rs.4,37,000 on 1st January, 2014 was scrapped on the same date and it
realised nothing.
Write a plant and
machinery account for the year 2015, allowing the same rate of depreciation as
in the past calculating depreciation to the nearest multiple of a Rupee.
see in detail
Q4.
M/s. Prabha Pharmaceuticals has imported a machine on 1st
July, 2014, for Pound 8,000, paid custom duty and freight Rs.80,000 and
incurred erection charges Rs.60,000. Another local machinery costing Rs.1,00,000
was purchased on 1st Jan 2015. On 1st July, 2016, a portion of the imported
machinery (value one-third) got out of order and was sold for Rs.1,34,800.
Another machinery was purchased to replace the same for Rs.50,000. Depreciation
is to be calculated at 20% p.a on cost. Show the machinery account for 2014,
2015, and 2016. Exchange rate is Rs.80 per pound.
see in detail
Q5.
The LG Transport company purchased 10 trucks at Rs.45,00,000
each on 1st April 2014. On October 1st, 2016, one of the trucks is involved in
an accident and is completely destroyed and Rs.27,00,000 is received from the
insurance in full settlement. On the same date another truck is purchased by
the company for the sum of Rs.50,00,000. The company write off 20% on the
original cost per annum. The company observe the calendar year as its financial
year.
Give the motor truck
account for two year ending 31 Dec, 2017
see in detail