AccountancyCLASS 11CBSE
answered 23 Jun 2026M/s Shnghania and Bros. purchase a plant for Rs. 5,00,000 on April, 01 2002, and spent Rs. 50,000 for its installation. The salvage value of the plant after its useful life of 10 years is estimated to be Rs. 10,000. Record journal entries for the year 2002-03 and draw up Plant Account and Depreciation Account for first three years given that the depreciation is charged using straight line method if : The books of account close on March 31 every year The firm charges depreciation to the assets account
A.VERIFIED ANSWERfact-checked by tutors
Books of Sighania and Bros
Journal
| Date | Particulars | L.F | Dr. Amount | Cr. Amount |
| 2002 April1 Apr. 01 2003 Mar.31 Mar.31 | Plant A/c Dr To Bank A/c (Being purchase plant for Rs. 5,00,000) | 5,00,000 50,000 54,000 54,0000 | 5,00,000 50,000 54,000 54,000 | |
| 2002 April1 Apr. 01 2003 Mar.31 Mar.31 | Plant A/c Dr. To Bank A/c (Being expenses incurred on installation) | 5,00,000 50,000 54,000 54,0000 | 5,00,000 50,000 54,000 54,000 | |
| 2002 April1 Apr. 01 2003 Mar.31 Mar.31 | Depreciation A/c Dr. To Plant A/c (Being Depreciation charged on assets) | 5,00,000 50,000 54,000 54,0000 | 5,00,000 50,000 54,000 54,000 | |
| 2002 April1 Apr. 01 2003 Mar.31 Mar.31 | Profit & loss A/c Dr. To Depreciation A/c (Depreciation debited to profit and loss account | 5,00,000 50,000 54,000 54,0000 | 5,00,000 50,000 54,000 54,000 |
Plant Account
| Date | Particulars | J.F | Amount | Date | Particulars | J.F | Amount |
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 5,00,000 50,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 54,000 4,96,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 5,50,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 5,50,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 4,96,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 54,000 4,42,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 4,96,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 4,96,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 4,42,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 54,000 3,88,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 4,42,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d | 4,42,000 | ||
| 2002 Apr.01 2003 Apr.01 2004 Apr.01 2005 Apr.01 | Bank Bank (installation charges) Balance b/d Balance b/d Balance b/d | 3,88,000 | 2003 Mar.31 2004 Mar. 31 2005 Mar.31 | Depreciation Balance c/d Depreciation Balance c/d Depreciation Balance c/d |
Depreciation Account
| Date | Particulars | J.F | Amount | Date | Particulars | J.F | Amount |
| 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Plant Plant Plant | 54,000 | 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Profit and loss Profit and loss Profit and loss | 54,000 | ||
| 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Plant Plant Plant | 54,000 | 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Profit and loss Profit and loss Profit and loss | 54,000 | ||
| 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Plant Plant Plant | 54,000 | 2003 Mar. 31 2004 Mar031 2005 Mar.31 | Profit and loss Profit and loss Profit and loss | 54,000 |
Working Notes
- Calculation of original cost
Purchase cost 5,00,000
Add: Installation charge 50,000
Original cost 5,50,000
Salvage value 10,000
Useful life 10 years
Rs. 5, 50,000 – Rs. 10,000
- Depreciation amount = ------------------------------ = 5,40,000
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