Question

Furniture was purchased in three lots of Rs. 3,000, Rs. 200 and Rs. 1,000 on 1st January,
1998, 1st July, 1999 and 1st April, 2000 respectively. Prepare furniture account for the
three years providing depreciation @ 10% p.a. on the basis of diminishing balance method.​

Answer 1

Answer:

Depreciation on SLM Basis = 10,000 x 10/100

= RS-1,000.

Depreciation On WDV basis :-

1st year (2005-06)

= 10,000 x 10/100

= RS-1,000.

2nd year (2006-07)

= (10,000 - 1,000) 9,000 x 10/100

= RS-9,00.

Difference in depreciation = Depreciation in SLM - Depreciation in WDV

= 1,000 - 9,00

= RS-100.