Question

On 1st April, 2014, Iqra Ltd. Purchased furnitire costing Rs,50,000. On 1st July 2017, the furniture was sold by for Rs, 20,000. depreciation is provided@ 10% p.a. on original cost method? prepare furniture account till 2017 assuming that accounts are closed on 31st march each year

Answer 1

Date PARTICULAR. RS.
1.4.2014. COST OF MACHINERY. 50000

31.3.2015. LESS : DEPRECIATION.
50000×10÷100. 5000

1.4.2015. BOOK VALUE. 45000

31.3.2016. LESS : DEPRECIATION.
45000×10÷100. 4500

1.4.2016. BOOK VALUE. 40500

31.3.2017. LESS : DEPRECIATION.
40500×10÷100. 4050

1.4.2017. BOOK VALUE. 36450

30.6.2017. LESS : DEPRECIATION
36450×10÷100×3÷12. 911.25

30.6.2017. BOOK VALUE. 35539(it's 35538.75)

Book value=35539
selling price=20000
since BOOK VALUE is greater than the SELLING PRICE IT'S LOSS.

LOSS ON SALE OF MACHINERY=35539-20000=15539


Furniture account

Debit: Date. particulars. RS. Date. particulars. RS
1.4.2014. To bank. 50000. 31.3.2015. By depreciation. 5000
31.3.2015. By balance c/d. 45000

Total 50000 Total. 50000


1.4.2015. To balance b/d. 45000. 31.3.2016. By depreciation. 4500
31.3.2016. By balance c/d. 40500

Total. 45000. Total. 45000

1.4.2016. To balance b/d. 40500. 31.3.2017. By depreciation. 4050
31.3.2017. By balance c/d. 36450

Total. 40500. Total. 40500

1.4.2017. To balance b/d. 36450. 30.6.2017. By depreciation. 911.25
30.6.2017. By Bank. 20000

30.6.2017. By profit and loss. 15539

Total. 36450. Total. 36450(it's 36450.25)