Question No 09 Chapter No 13
Addition to Assets and Life Given in Years
9. On 1st April,2015, Harnam Singh purchased certain furniture items costing Rs 85,000. It is estimated that its working life is 10 Years, at the end of which it will fetch Rs 5,000. Additions are made on 1st April,2016 and 1st Octuber,2018, to the value of Rs 19,800 and Rs 12,400(Residual values Rs 1,800 and Rs 2,400 respectively)
Show the furniture account for first four years, if depreciation is provided according to straight line method and books are closed on 31st March. The life of new furniture id also 10 years
The solution of Question No 09 Chapter No 13:-
| Dr. | Furniture A/c | Cr. | |||||
| Date | Particulars |
J.F. | Amount | Date | Particulars |
J.F. | Amount |
| 01/01/15 | To Cash A/c | 85,000 | 31/03/16 | By Deprecation A/c | 8,000 | ||
| 31/03/16 | By Balance C/d | 77,000 | |||||
| 85,000 | 85,000 | ||||||
| 01/03/16 | To Balance b/d | 72,000 | 31/03/17 | By Deprecation A/c(8,000 + 1,800) | 9,800 | ||
| 01/03/16 | To Cash A/c | 19,800 | 31/03/17 | By Balance C/d | 87,000 | ||
| 96,800 | 96,800 | ||||||
| 01/03/17 | To Balance b/d | 87,000 |
31/03/18 | By Deprecation A/c | 9,800 | ||
| 31/03/18 | By Balance C/d | 77,200 |
|||||
| 87,000 | 87,000 | ||||||
| 01/03/18 | To Balance b/f | 77,200 | 31/03/19 | By Deprecation A/c | 10,300 | ||
| 01/10/18 | To Cash A/c | 12,400 | 31/03/19 | By Balance C/d | 79,300 |
||
| 89,600 |
89,600 |
||||||
Working note:-
The method of calculating the amount of Deprecation furniture purchased on 1st April 2015:
| Amount of Depreciation = | Cost of assets- Estimated Realizable or Scrap value |
| Number of years of expected useful life |
Cost of assets = Cost of Furniture = 85,000
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 5,000
| Amount of Depreciation = | 85,000-5,000 | = 8,000 |
| 10 |
The method of calculating the amount of Deprecation furniture purchased on 1st April 2016:
| Amount of Depreciation = | Cost of assets- Estimated Realizable or Scrap value |
| Number of years of expected useful life |
Cost of assets = Cost of Furniture = 19,800
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 1,800
| Amount of Depreciation = | 19,800 – 1,800 | = 1,800 |
| 10 |
The method of calculating the amount of Deprecation furniture purchased on 1st October 2018:
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| Amount of Depreciation = | Cost of assets- Estimated Realizable or Scrap value |
| Number of years of expected useful life |
Cost of assets = Cost of Furniture = 12,400
Number of years of expected useful life = 10 years
Estimated Retaliated or Scrap value = 2,400
| Amount of Depreciation = | 12,400 – 2,400 | = 1,000 |
| 10 | ||
| = 1,000 X 6/12 | ||
| = 500 |
Depreciation | Meaning | Methods | Examples
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Vouchers and transactions
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Chapter No. 4 – Journal
Chapter No. 5 – Ledger
Chapter No. 6 – Cash Book
Chapter No. 7 – Other Subsidiary Books
Chapter No. 8 – Journal Proper
Chapter No. 9 – Trial Balance
Chapter No. 10 – Bank Reconciliation Statement
Chapter No. 11 – Depreciation
Chapter No. 12 – Provisions and Reserves
Chapter No. 13 – Bills of Exchange
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Chapter No. 14 – Rectification of Errors
Chapter No. 15 – Financial Statements – (Without Adjustments)
Chapter No. 16 – Financial Statements – (With Adjustments)