Page 121 - ISCDEBK-XI

15.6 Double Entry Book Keeping—ISC XI

Solution:
Total Cost of Asset  Scrap Value
Annual Depreciation =
Estimated Useful Life of Plant (in years)
` 4,00,000 `  10,000 ( 12,000  ` 2,000)
`
= 5
` 4,00,000
= = ` 80,000 per year.
5
Dr. PLANT ACCOUNT Cr.
Date Particulars ` Date Particulars `

2016 2017
April 1 To Bank A/c (Cost) 1,00,000 March 31 By Balance c/d 4,10,000
To Bank A/c (Expenses) 10,000
To Supplier 3,00,000 4,10,000
4,10,000 4,10,000
2017 2018
April 1 To Balance b/d 4,10,000 March 31 By Balance c/d 4,10,000
4,10,000 4,10,000
2018 2019
April 1 To Balance b/d 4,10,000 March 31 By Balance c/d 4,10,000
4,10,000 4,10,000
2019 2020
April 1 To Balance b/d 4,10,000 March 31 By Provision for Depreciation A/c 3,20,000
March 31 By Bank A/c (Insurance Claim) 50,000
March 31 By Loss by Fire A/c (Bal. Fig.) 40,000
(Profit & Loss A/c)
4,10,000 4,10,000

Dr. PROVISION FOR DEPRECIATION ACCOUNT Cr.
Date Particulars ` Date Particulars `
2017 2017
March 31 To Balance c/d 80,000 March 31 By Depreciation A/c 80,000
80,000 80,000
2018 2017
March 31 To Balance c/d 1,60,000 April 1 By Balance b/d 80,000
2018
March 31 By Depreciation A/c 80,000
1,60,000 1,60,000
2019 2018
March 31 To Balance c/d 2,40,000 April 1 By Balance b/d 1,60,000
2019
March 31 By Depreciation A/c 80,000
2,40,000 2,40,000

2020 2019
March 31 To Plant A/c (Transfer) 3,20,000 April 1 By Balance b/d 2,40,000
2020
March 31 By Depreciation A/c 80,000
3,20,000 3,20,000