Shantikunj Company, Rajoli purchased furniture worth Rs. 38,400 and paid Rs. 1,600 for installation charges on 1stJanuary, 2004. (10)
On 31st March every year, the company charged depreciation @ 10% p.a. on original cost.
On 1stOct.2004 the company purchased an additional furniture costing Rs. 24,000.
The company sold furniture for Rs. 31,500 on 31stDecember 2005, which was purchased on 1st January 2004.
Company purchased a new furniture worth Rs. 20,000 on 31st March, 2006.
You are required to prepare Furniture account and depreciation account for the years 2003-2004, 2004-2005 and 2005-2006.
In the books of Shantikunj Company
| Date | Particulars | JF | Amt Rs. | Date | Particulars | JF | Amt Rs. |
| 1-1-04 | To Cash / Bank A/c | | | | By Depreciation A/c By Balance c/d | | 1,000 39,000 |
| 40,000 | 31-3-04 31-3-04 | ||||||
| 40,000 | 40,000 | ||||||
| | | | | | | | |
| 1-4-04 1-10-04 | To balance b/d To Cash / Bank A/c | | 39,000 24,000 | 31-3-05 31-3-05 | By Depreciation A/c (4000 + 1200) By Balance c/d | | 5,200 57,800 |
| 63,000 | 63,000 | ||||||
| | | | | | | | |
| 1-4-05 31-3-06 | To balance b/d To Cash / Bank | | 57,800 20,000 | 31-12-05 31-12-05 31-12-05 31-3-06 31-3-06 | By Cash / Bank A/c By Profit & Loss A/c By Depreciation A/c By Depreciation A/c By Balance c/d | | 31,500 500 3,000 2,400 40,400 |
| 77,800 | 77,800 | ||||||
| | | | | | | | |
| 1-4-06 | To balance b/d | | 40,400 | | | | |
| | | | 40,400 | | | | 40,400 |
Depreciation A/c.
| Date | Particulars | JF | Amt Rs. | Date | Particulars | JF | Amt Rs. |
| 31-3-04 | To Furniture A/c | | 1,000 | 31-3-04 | By Profit & Loss A/c | | 1,000 |
| | | | 1,000 | | | | 1,000 |
| 31-3-05 | To Furniture A/c | | 5,200 | 31-3-05 | By Profit & Loss A/c | | 5,200 |
| | | | 5,200 | | | | 5,200 |
| 31-12-05 | To Furniture A/c To Furniture A/c | | 3,000 2,400 | 31-3-06 | By Profit & Loss A/c | | 5,400 |
| | | | 5,400 | | | | 5,400 |
Working Note :-
To find Profit or loss on sale of Furniture
Original cost as on 1-1-04 40,000
(-) Depreciation (3 months) 1,000
Book value as on 1-1-04 39,000
(-) 10% Dep. (2004 – 05) 4,000
Book Value as on 1-4-05 35,000
(-) Depreciation (9 months) 3,000
Book value as on 31-12-05 32,000
Less: Selling Price 31,500
Loss on Sale