Question

A company purchased some furniture costing ? 20,000 on 1st January, 2000. They decided to write off depreciation @ 10% per annum on the diminishing balance annually on 31st December. On 30th September, 2001 purchased further furniture items worth 10,000. On 1st July, 2002 some furniture items purchased in 2000, which originally

cost 2,000, was sold for? 1,800. Show the Furniture Account for the years 2000 to 2003.​

Answer 1

Answer:

889166

Explanation:

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Answer 2

Furniture Account with depreciation charged on them.

Explanation:

As per the diminishing balance method, depreciation is charged at a fixed percentage on the book value of the asset. Since the book value decreases every year, it is also called the reducing balance method or the written-down value method.

Since the book value decreases every year, the amount of depreciation decreases every year as well. Under this method, the value of the asset is never zero.

Refer to the Attachment for Furniture Account.