Posted: January 10th, 2022
On 1st April, 2011 a new plant was purchased for Rs. 40,000 and a further sum of Rs. 2,000 was spent on its installation.On 1st October, 2013 another plant was acquired for Rs. 25,000.Due to an accident on 3rd January, 2014 the first plant was totally destroyed and the scrapwas sold for Rs. 1,000 only.On 21st January, 2015 a second hand plant was purchased for Rs. 30,000 and further a sumof Rs. 5,000 was spent on bringing the same to use on and from 26th March, 2015.Depreciation has been provided at 10% on straight line basis. It was the practice to providedepreciation for full year on all acquisitions made at any time during the year and to ignoredepreciation on any item sold or disposed during the year. None of the assets were insured.The accounts are closed annually on 31st March.It is now decided to follow the rate of 15% on diminishing balance method with retrospectiveeffect in respect of the existing items of plant and to make the necessary adjustment entry on1st April, 2015.Prepare Plant Account for all the years.
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