installation. The depreciation is written off at % p.a. on the straight line method. The plant was sold for Rs.
, , on October , and on the same date a new Plant was installed at the cost of Rs. , , including purchasing value. The accounts are closed on December every year. Show the machinery account and provision for depreciation account for years.
(Ans: Loss on sale of Plant Rs. , . Balance of Machine account as on . .
Rs. , . Balance of Provision for Depreciation account as on . .
Rs. , .). . An extract of Trial balance from the books of Tahiliani and Sons Enterprises on March , is given below: Name of the Account Debit Amount Credit Amount Sundry debtors.
, Bad debts , Provision for doubtful debts , Additional Information: Bad Debts proved bad but not recorded amounted to Rs. , . Provision is to be maintained at % of Debtors. Give necessary accounting entries for writing off the bad debts and creating the provision for doubtful debts account.
Also show the necessary accounts. (Ans: New provision for Bad debts Rs. , , profit and loss account [Dr.] Rs. , .) .
The following information are extract from the Trial Balance of M/s Nisha traders on March . Sundry Debtors , Bad debts , Provision for bad debts , Additional Information Bad Debts Rs. Provision is to be maintained at % of Debtors. Prepare bad debts accound, Provision for bad debts account and profit and loss account.
(Ans: New provision Rs. , Profit and loss account [Cr.] Rs. , ). Checklist to Test Your Understanding Test Your Understanding - I .
Fixed assets, exhaustion of natural resources, specific contracted business. . Amortisation Test Your Understanding - II . T, .
F, Test Your Understanding - III Written down value method is more appropriate because this method is suitable for those assets which are affected by technological changes. Moreover, this method is recognised by income tax hand. Test Your Understanding -