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

Furniture Account
Dr.							Cr.
Date		Particulars	Amount (Rs)	Date	Particulars	Amount (Rs)
2017				2017
April 01		Balance b/d		Sept.30	Depreciation (i) (for 6 Months)	1.500
		(i) 30,000		Sept.30	Bank (Sale) (i)	20,000
		(ii) 30,000	60,000	Sept.30	Income and Expenditure (Loss on Sale)	8,500
				2018
				March 31	Depreciation (ii) (for whole year)	3,000
					Balance c/d (ii) (30,000 – 3,000)	27,000
			60,000			60,000

Income and Expenditure Account for the year ended March 31, 2018
Dr.					Cr.
Expenditure		Amount (Rs)	Income	Amount (Rs)
Depreciation on Furniture
(1,500 + 3,000)		4,500
Loss on Sale of Furniture		8,500

Working Note:

Calculation of Profit or Loss on Sale of Furniture

Particulars	Amount (Rs)
Book Value of Furniture Sold as on April 01, 2018	30,000
Less: Depreciation (for 6 Months) (3,000 × 10% × 6/12)	1,500
Book Value of Furniture as on Sept. 30, 2017	28,500
Less: Sale Value	20,000
Loss on Sale of Furniture	8,500