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Sir both plant account and plant repairs account are asset? Right? But I got the wrong answer all the time
A company Y purchased some plant on 1 January 20X0 for 38000.
The payment for the plant was correctly entered in the cashbook but was entered on the debit side of plant repairs account.
Y charges depreciation on the straight line basis at 20% PA with a proportionate charge in the year of acquisition and assuming no scrap value at the end of the life of the asset
How will Y’s profit for the year ended 31 March 20×0 be affected by the error?
The plant account is an asset and will appear in the SOFP.
Plant repairs is an expense and will appear in the SOPL.