The book value of furniture on 1st April, 2018 is ₹ 60,000. Half of this furniture is sold for ₹ 20,000 on 30th September, 2018. Depreciation is to be charged on furniture @ 10% p.a.
Calculate loss on sale of furniture. Show how the loss on sale and depreciation on furniture will be shown in the Income and Expenditure Account for the year ended 31st March, 2019.
Furniture Account
| Date | Particulars | Amount(Rs.) | Date | Particulars | Amount(Rs.) |
| 2018 | 2018 | ||||
| April 01 | Balance b/d | Sept.30 | Depreciation (i) (for 6 Months) | 1.500 | |
| (i) 30,000 | Sept.30 | Bank (Sale) (i) | 20,000 | ||
| (ii) 30,000 | 60,000 | Sept.30 | Income and Expenditure (Loss on Sale) | 8,500 | |
| 2019 | |||||
| March 31 | Depreciation (ii) (for whole year) | 3,000 | |||
| Balance c/d (ii) (30,000 – 3,000) | 27,000 | ||||
| 60,000 | 60,000 |
Income and Expenditure Account
for the year ended March 31, 2019
| Expenditure | Amount(Rs.) | Income | Amount(Rs.) |
| Depreciation on Furniture | |||
| (1,500 + 3,000) | 4,500 | ||
| Loss on Sale of Furniture | 8,500 |
Working Note:
Calculation of Profit or Loss on Sale of Furniture
| Particulars | Amount(Rs.) |
| Book Value of Furniture Sold as on April 01, 2018 | 30,000 |
| Less: Depreciation (for 6 Months) (3,000 × 10% × 6/12) | 1,500 |
| Book Value of Furniture as on Sept. 30, 2018 | 28,500 |
| Less: Sale Value | 20,000 |
| Loss on Sale of Furniture | 8,500 |