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Home Questions T8T4HGWXM7
Target Exam

CUET

Subject

Accountancy

Chapter

Cash Flow Statement

Question:

Read the following information and answer the question.

PARTICULARS AMOUNT AT THE BEGINNING
OF THE YEAR (₹)		 AMOUNT AT THE END
OF THE YEAR (₹)
Plant (cost) 3,00,000 3,20,000
Accumulated depreciation 90,000 1,00,000
Patents 2,60,000 1,40,000
Goodwill 80,000 1,00,000

ADDITIONAL INFORMATION:

  1. The depreciation charged during the year on the plant was ₹36,000.
  2. A plant having a book value of ₹20,000 was sold for ₹16,000 during the year.
  3. Patents having a book value of ₹80,000 were sold for ₹1,10,000 during the year.

How much amount is paid to purchase the plant?

Options:

₹76,000

₹66,000

₹70,000

₹86,000

Correct Answer:

₹66,000

Explanation:

The correct answer is option 2- ₹66,000.

 

ACCUMULATED DEPRECIATION ACCOUNT

PARTICULARS AMOUNT (₹) PARTICULARS AMOUNT (₹)
To Plant A/c
(Balancing figure for the depreciation
on sold machinery)		 26,000 By balance b/d 90,000
To balance c/d 1,00,000 By depreciation 36,000
  1,26,000   1,26,000

 

 PLANT ACCOUNT

PARTICULARS AMOUNT (₹) PARTICULARS AMOUNT (₹)
To Balance b/d 3,00,000 By Bank A/c
(sale)		 16,000
To Bank A/c
(Balancing figure as purchases)		 66,000 By accumulated depreciation 26,000
    By loss on sale 4,000
    By balance c/d 3,20,000
  3,66,000   3,66,000

THUS, PLANT IS PURCHASED DURING THE YEAR FOR 66,000

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