On 1st jan ,2011 a merchant purchased a furniture costing Rs 55,000.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 jan 2002 and 1st july 2004 to the value of Rs 9,500and Rs 8,400 (residual values 500 and 400 respectively ).Show the furniture account for the first 4 years,if depreciation is written off according to the straight line meathod.
Furniture Account | ||||||
Date | Particulars | Amount | Date | Particulars | Amount | |
Jan 01, 2001 | Bank A/c (F1) | 55,000 | Dec 31, 2001 | Depreciation A/c (WN1) | 5,000 | |
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| Dec 31, 2001 | Balance c/d | 50,000 | |
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| 55,000 |
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| 55,000 | |
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Jan 01, 2002 | Balance b/d | 50,000 | Dec 31, 2002 | Depreciation- |
| |
Jan 01, 2002 | Bank A/c (F2) | 9,500 |
| F1 | 5,000 |
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| F2 | 900 | 5,900 |
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| Balance c/d | 53,600 | |
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| 59,500 |
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| 59,500 | |
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Jan 01, 2003 | Balance b/d | 53,600 | Dec 31, 2003 | Depreciation- |
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| F1 | 5,000 |
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| F2 | 900 | 5,900 |
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| Dec 31, 2003 | Balance c/d | 47,700 | |
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| 53,600 |
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| 53,600 | |
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Jan 01, 2004 | Balance b/d | 47,700 | Dec 31, 2004 | Depreciation |
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July 01, 2004 | Bank A/c (F3) | 8,400 |
| F1 | 5,000 |
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| F2 | 900 |
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| F3 (6 months) | 400 | 6,300 |
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| Dec 31,2004 | Balance c/d | 49,800 | |
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| 56,100 |
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| 56,100 | |
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Working Notes:
WN1 Calculation of Depreciation of Furniture 1 (F1)
Cost of Furniture = Rs 55,000
Scrap Value = Rs 5,000
Estimated Working Life = 10 years
WN2 Calculation of Depreciation of Furniture 2 (F2)
Cost of Furniture = Rs 9,500
Scrap Value = Rs 500
Working Life = 10 years
WN3 Calculation of Depreciation of Furniture 3 (F3)
Cost of Furniture = Rs 8,400
Scrap Value = Rs 400
Working Life = 10 years
