Question

The book value of furniture on 1st April, 2017 is ₹ 60,000. Half of this furniture is sold for ₹ 20,000 on 30th September, 2017. Depreciation is to be charged on furniture @ 10% p.a.
Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2018.

Answer 1

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Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2018

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Answer 2

Explanation:

The depreciation of furniture for 6 months is calculated at straight line method and the furniture is sold at a loss. The loss amount is calculated and the same is posted in the profit and loss account. Furniture account is also formulated. The loss incurred on sale of furniture is Rs 8,500.