Question

On 1st April, 2014, furniture costing ₹ 55,000 was purchased. It is estimated that its life is 10 years at the end of which it will be sold for ₹ 5,000. Additions are made on 1st April 2015 and 1st October, 2017 to the value of ₹ 9,500 and ₹ 8,400 (Residual values ₹ 500 and ₹ 400 respectively). Show the Furniture Account for the first four years, if Depreciation is written off according to the Straight Line Method.

Answer 1

Furniture Account
Dr.											Cr.
Date		Particulars		J.F.	Amount (Rs)	Date	Particulars		J.F.	Amount (Rs)
2014						2015
April 01		Bank (F1)			55,000	March 31	Depreciation (F1)			5,000
						March 31	Balance c/d (F1)			50,000
					55,000					55,000
2015						2016
April 01		Balance b/d (F1)			50,000	March 31	Depreciation
April 01		Bank (F2)			9,500		F1	5,000
							F2	900		5,900
						March 31	Balance c/d
							F1	45,000
							F2	8,600		53,600
					59,500					59,500
2016						2017
April 01		Balance b/d				March 31	Depreciation
		F1	45,000				F1	5,000
		F2	8,600		53,600		F2	900		5,900
						March 31	Balance c/d
							F1	40,000
							F2	7,700		47,700
					53,600					53,600
2017						2018
April 01		Balance b/d				March 31	Depreciation
		F1	40,000				F1	5,000
		F2	7,700		47,700		F2	900
Oct. 01		Bank (F3)			8,400		F3	400		6,300
						March 31	Balance c/d
							F1	35,000
							F2	6,800
							F3	8,000		49,800
					56,100					56,100

Working Notes: