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Question 11 Chapter 11 – Unimax Publications of Class 11
Diminishing Balance Method
Question.11 A company purchased a plant for ₹ 60,000 on 1st Jan.,2016. It is estimated that scrap value of this plant at the end of its working life of 12 years will be ₹ 12,420. Depreciation is to be provided @ 10% p.a. by ‘Diminishing balance method’.
Prepare plant account for 4 years assuming that books are closed on 31st Dec., each year.
The solution of Question 11 Chapter 11 – Unimax Publications of Class 11
| Dr. | Machine A/c | Cr. | |||||
| Date | Particulars | J.F. | Amount | Date | Particulars | J.F. | Amount |
| 01/01/16 | To Bank A/c | 60,000 | 31/12/16 | By Deprecation A/c | 6,000 | ||
| 31/12/16 | By Balance C/d | 54,000 | |||||
| 60,000 | 60000 | ||||||
| 01/01/17 | To Balance b/d | 54,000 | 31/12/17 | By Deprecation A/c | 5,400 | ||
| 31/12/17 | By Balance C/d | 48,600 | |||||
| 54,000 | 54,000 | ||||||
| 01/01/18 | To Balance b/d | 48,600 | 31/12/18 | By Deprecation A/c | 4,860 | ||
| 31/12/18 | By Balance C/d | 43,740 | |||||
| 48,600 | 48,600 | ||||||
| 01/01/19 | To Balance b/d | 43,740 | 31/12/19 | By Deprecation A/c | 4,374 | ||
| 31/12/19 | By Balance C/d | 39,366 | |||||
| 43,740 | 43,740 | ||||||
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