Question

Delhi Youth Club has furniture at a value of ₹ 2,20,000 in its book on 31st March, 2017. It sold old furniture , having book value of ₹ 20,000 as at 1st April, 2017 at a loss of 20% on 31st December, 2017. Furniture is to be depreciated @ 10% p.a. Furniture costing ₹ 1,50,000 was also purchased on 1st October, 2017.
Prepare Furniture Account for the year ended 31st March, 2018.

Answer 1

Explanation:

The straight line value method of depreciation is used to calculate the depreciation of the furniture. The loss value is provided in the question so the sale price of the furniture can be determined by calculating the depreciation and deducting it from book value. The selling price of the furnitures is Rs14,800.