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Question -

Azad Ltd. purchased furniture on October 01, 2014 for Rs 4,50,000. On March 01, 2015 it purchased another furniture for Rs 3,00,000. On July 01, 2016 it sold off the first furniture purchased in 2014 for Rs 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 -

Books of Azad Ltd.

Furniture Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount Rs

Date

Particulars

J.F.

Amount 

Rs

2014

 

 

 

2015

 

 

 

Oct.01

Bank (i)

 

4,50,000

 

 

 

 

2015

 

 

 

Mar.31

Balance c/d

 

7,50,000

Mar.01

Bank (ii)

 

3,00,000

 

 

 

 

 

 

 

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

 

7,50,000

July 01

Furniture Disposal

 

4,50,000

 

(i) 4,50,000, (ii) 3,50,000

 

 

2005

 

 

 

 

 

 

 

Mar.31

Balance c/d

 

3,00,000

 

 

 

7,50,000

 

 

 

7,50,000

 

 

 

 

 

 

 

 

 

Accumulated Depreciation Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount 

Rs

Date

Particulars

J.F.

Amount

 Rs

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

 

 

 

 

 

 

 

 

 

Furniture Disposal Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount Rs

Date

Particulars

J.F.

Amount 

Rs

2016

 

 

 

2016

 

 

 

Jul.01

Furniture

 

4,50,000

Jul.01

Accumulated Dep.

 

1,09,456

 

 

 

 

Jul.01

Bank

 

2,25,000

 

 

 

 

Jul.01

Profit and 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

 

 

 

 

 

 

 

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