Question

Deluxe company purchased a furniture worth Rs 80,000 on 1st April 2009 and Additional Furniture on 1st October 2009 worth Rs 60,000.

They charged depreciation at 15% p.a. on Fixed Instalment basis

On 1st October 2011 they sold out furniture for Rs 60,000 which was purchased on 1st April 2009. Prepare Furniture Account and Depreciation Account for the year 2009-10, 2010-11 and 2011-12 assuming that the financial year closes on 31st March every year.

Answer 1

Furniture Account
Dr.									Cr.
Date		Particulars		Amount (Rs)	Date	Particulars		Amount (Rs)
2009					20010
Apr 1		Bank (F1)		80,000	Mar 31	Depreciation A/c
Oct 1		Bank (F2)		60,000		F1	12,000
						F2 (for 6 months)	4,500	16,500
					Mar 31	Balance c/d
						F1 (80,000 - 12,000)	68,000
						F2 (60,000 - 4,500)	55,500	1,23,500
				1,40,000				1,40,000
2010					2011
Apr 1		Balance b/d			Mar 31	Depreciation A/c
		F1	68,000			F1	12,000
		F2	55,500	1,23,500		F2	9,000	21,000
					Mar 31	Balance c/d
						F1 (68,000 - 12,000)	56,000
						F2 (55,500 - 9,000)	46,500	1,02,500
				1,23,500				1,23,500
2011					2011
Apr 1		Balance B/d			Oct 1	Depreciation A/c (F1) (for 6 months)		6,000
		F1	56,000		Oct 1	Bank A/c		60,000
		F2	46,500	1,02,500	2012
Oct 1		Profit & Loss A/c		10,000	Mar 31	Depreciation A/c F2		9,000
					Mar 31	Balance c/d F2 (46,500 - 9,000)		37,500
				1,12,500				1,12,500

Depreciation Account
Dr.							Cr.
Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2010				2010
Mar 31		Furniture A/c	16,500	Mar 31	Profit and loss A/c	16,500
			16,500			16,500
2011				2011
Mar 31		Furniture A/c	21,000	Mar 31	Profit and loss A/c	21,000
			21,000			21,000
2012				2012
Oct 1		Furniture A/c	6,000	Mar 31	Profit and loss A/c	15,000
Mar 31		Furniture A/c	9,000
			15,000			15,000

Working Notes: Calculation of Profit or Loss on Sale

Particulars	Amount
Value of Furniture as on Mar. 31, 2011	56,000
Less: Depreciation for 6 months	(6,000)
Value of Furniture as on Oct. 01, 2011	50,000
Less: Sale Value	(60,000)
Profit on Sale	(10,000)