Question

Azad Ltd. purchased furniture on October 01, 2014 for ₹ 4,50,000. On March 01, 2015 it purchased another furniture for ₹ 3,00,000. On July 01, 2016, it sold off the first furniture purchased in 2014 for ₹ 2,25,000. Depreciation is provided at 15% p.a. on written down value method each year. Accounts are closed each year on March 31. Prepare furniture account, and accumulated depreciation account for the years ended on March 31, 2015, March 31, 2016 and March 31, 2017. Also give the above two accounts if furniture disposal account is opened.

Answer 1

Dr.	Books of Azad Ltd. Furniture Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2014				2015
Oct.01	Bank (i)		4,50,000
2015
Mar.01	Bank (ii)		3,00,000	Mar.31	Balance c/d		7,50,000
			7,50,000				7,50,000
2015				2016
Apr.01	Balance b/d (i) 4,50,000 (ii) 3,00,000		7,50,000
				Mar.31	Balance c/d		7,50,000
			7,50,000				7,50,000
2016				2016
Apr.01	Balance b/d (i) 4,50,00  (ii) 3,50,000		7,50,000	Jul.01	Furniture Disposal		4,50,000
				2005
				Mar.31	Balance c/d		3,00,000
			7,50,000				7,50,000

 

Dr.	Accumulated Depreciation Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2015				2015
Mar.31	Balance c/d		37,500	Mar.31	Depreciation (i) 33,750 (ii) 3,750		37,500
			37,500				37,500
2016				2015
Mar.31	Balance c/d		1,44,376	Apr.01	Balance b/d		37,500
				2016
				Mar.31	Depreciation (i) 62,438 (ii) 44,378		1,06,876
			1,44,376				1,44,376
2016				2016
July.01	Furniture Disposal		1,09,456	Apr.01	Balance b/d		1,44,376
2017				July.01	Depreciation (i)		13,268
Mar.31	Balance c/d		85,960	2017
				Mar.31	Depreciation (ii)		37,772
			1,95,416				1,95,416

 

Dr.	Furniture Disposal Account						Cr.
Date	Particulars	J.F.	Amount ₹	Date	Particulars	J.F.	Amount ₹
2016				2016
Jul.01	Furniture		4,50,000	Jul.01	Accumulated Dep.		1,09,456
				Jul.01	Bank		2,25,000
					Profit and
				Jul.01	Loss (Loss)		1,15,544
			4,50,000				4,50,000

Working Note: 

Furniture (i)

Years	Opening Balance		Depreciation			Closing Balance
2014 – 2015	4,50,000	–	33,750		=	4,16,250
2015 – 2016	4,16,250	–	62,438		=	3,53,812
2016	3,53,812	–	13,268	(3 months)	=	3,40,544
			1,09,456

 

Balance on July 01, 2016	3,40,544
Less: Sale on July 01, 2016	(2,25,000)
Loss on sale of furniture	1,15,544