Question No 29 Chapter No 12

29.On 1st April, 2018, following balances appeared in the books of M/s Krishna Traders:

 Furniture Account 50,000 Provision for Depreciation on Furniture Account 22,000

On 1st October 2018, a part of Furniture purchased for 20,000 on 1st April 2014 was sold for 5,000. On the same date, a new piece of furniture costing 25,000 was purchased.
The depreciation was provided @ 10% p.a. on the original cost of the asset and no depreciation was charged on the asset in the year of sale. Prepare ‘Furniture Account’ and ‘Provision for Depreciation Account’ for the year ending 31st March 2019.

## The solution of Question No 29 Chapter No 12: –

 Dr. Machinery A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 1st Apr.2018 To Balance b/f(30,000 + 20,000) 50,000 1st Oct.2018 By Provision forDepreciation A/c 8,000 1st Oct.2018 To Bank A/c 25,000 1st Oct.2018 By Bank A/c (Sale) 5,000 1st Oct.2018 By Profit & Loss A/c 7,000 31st Mar 2019 By Balance C/d 55,000 75,000 75,000
 Dr. Provision for Depreciation  A/c Cr. Date Particulars J.F. Amount Date Particulars J.F. Amount 31stOct.2018 To Furniture A/c 8,000 31st Apr 2018 By Balance b/d 22,000 31st Mar.2019 By Depreciation A/c* 4,250 31stMar.2019 Balance c/d 18,250 26,250 26,250

Working Note:
Calculation of Profit or Loss on Sale M1

 Statement Showing the Profit and loss on the sale of Plant Particulars Amount Furniture Purchase on of Equipment as on 1st Apr. 2014 20,000 Less: Depreciation for 4 Years @ 10% 8,000 Value of Furniture on Oct. 01, 2018 12,000 Sale Price of Machinery 5,000 Loss on the sale of the asset 7,000
 *Depreciation charged during the year Particulars Amount On Rs 30,000 @ 10% 3,000 On Rs 25,000 @ 10% for 6 months 1,250 4,250

Depreciation | Meaning | Methods | Examples

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