Question

Delhi Youth Club has furniture at a value of ₹ 2,20,000 in its book on 31st March, 2018. It sold old furniture, having book value of ₹ 20,000 as at 1st April , 2018 at a loss of 20% on 31st December, 2018. Furniture is to be depreciated @ 10% p.a. Furniture costing ₹ 1,50,000 was also purchased on 1st October, 2018.
Prepare Furniture Account for the year ended 31st March, 2019.

Answer 1

Furniture Account
Dr.							Cr.
Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2018				2018
Apr. 01		Balance b/d		Dec. 31	Depreciation (ii) (for 9 Months)	1,500
		(i) 2,00,000		Dec. 31	Bank (Sale (ii))	14,800
		(ii) 20,000	2,20,000	Dec. 31	Income and Expenditure (Loss on Sale)	3,700
Oct. 01		Bank (iii)	1,50,000	2019
				Mar. 31	Depreciation
					(i) 20,000
					(iii) 7,500 (for 6 Months)	27,500
				Mar. 31	Balance c/d
					(i) 1,80,000
					(iii) 1,42,500	3,22,500
			3,70,000			3,70,000

Working Note:
Calculation of Profit or Loss on Sale of Furniture

Particulars	Amount (₹)
Book Value of Furniture (i) as on April 01, 2018	20,000
Less: Depreciation (for 9 Months) [20,000 × 10% × 9/12]	(1,500)
Book Value on December 31, 2018	18,500
Less: Loss on Sale of Furniture (18,500 × 20%)	(3,700)
Sale Value of Furniture	14,800