Mehta and Company had the following balance appearing in its books of account as on 1 st April, 2024: Particulars Amount (₹) Plant and Machinery A/c…

CA Foundation · Accounting · PYQS · January 2026
Mehta and Company had the following balance appearing in its books of account as on 1 st April, 2024: Particulars Amount (₹) Plant and Machinery A/c 1,42,50,000 Its accounts are made up to 31 st March every year and depreciation is charged @10% per annum under the Written Down Value Method. On 1 st September, 2024 a new machine was acquired at a cost of 21,20,000 and a sum of 46,900 was incurred on the same day towards installation charges for erecting the said machine. On the same date a machine which had cost - 32,80,500 on 1 st April, 2022 was auctioned for 5,62,500. Another machine which had cost - 32,77,500 on 1 st April, 2023 having become obsolete, was scrapped on 1 st September, 2024 and it realized nothing. You are required to prepare the Plant and Machinery Account in the books of Mehta and Company for the year ended 31 st March, 2025. Also show the working for profit loss on sale and scrapping of the machines. Round off the figures to the nearest multiple of a rupee.

Suggested Answer and Working Notes:

In the books of Mehta and Company Plant and Machinery Account Date Particulars Amount ₹ Date Particulars Amount ₹ 01.04.24 To Balance b/d 1,42,50,000 01.09.24 By Bank (Sales) 5,62,500 01.09.24 To Bank (₹ 21,20,000 +46,900) 21,66,900 01.09.24 By Depreciation (Note i) (on sold machine) 1,10,717 01.09.24 By Loss on sale 19,83,988 01.09.24 By Loss on scrapping the machine 28,26,844 01.09.24 By Depreciation (on scrapped machinery) (Note ii) 1,22,906 31.03.25 By Depreciation (Note iii) 9,90,707 31.03.25 By Balance c/d 98,19,238 1,64,16,900 1,64,16,900 Working Note: (i) Calculation of loss on sale of machine on 1-9-2024 Particulars ₹ Cost on 1-4-2022 32,80,500 Less: Depreciation @10% (₹ 3,28,050) W.D.V. on 31-3-2023 29,52,450 Less: Depreciation @10% (₹ 2,95,245) W.D.V. on 31-3-2024 26,57,205 Less: Depreciation @10% on 2,65,705 for5 months (₹ 1,10,717) 25,46,488 Less: Sale proceeds on 1-9-2024 (₹ 5,62,500) Loss on sale of machine 19,83,988 (ii) Calculation of loss on scrapped machine on 1-9-2024 Particulars ₹ Cost on 1-4-2023 32,77,500 Less: Depreciation @10% on 32,77,500 (₹ 3,27,750) W.D.V. on 31-3-2024 29,49,750 Less: Depreciation @10% on 29,49,750 for5 months (₹ 1,22,906) Loss 28,26,844 (iii) Depreciation ₹ Balance of machinery account on 1-4-2024 1,42,50,000 Less: W.D.V of machinery sold 26,57,205 W.D.V. of machinery scrapped 29,49,750 (₹ 56,06,955) W.D.V. of other machinery on 1-4-2024 86,43,045 Depreciation @10% on 86,43,045 for12 months 8,64,305 Depreciation @10% on 21,66,900 for7 months 1,26,402 9,90,707

Topics: Depreciation and Amortisation

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