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Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.?
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Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-201...
Treatment of Furniture in Income and Expenditure Account and Balance Sheet
Income and Expenditure Account:
Profit on Sale of Furniture:
- The furniture was sold at a profit of 10% on 31st Dec.2017
- The profit on sale of furniture will be calculated as follows:
Profit on sale = Sales price - Book value
Book value = Rs.40,000
Sales price = Rs.44,000 (10% profit on book value)
Profit on sale of furniture = Rs.4,000
Depreciation on Furniture:
- Furniture purchased on 1-10-2017 for Rs.2,00,000
- Depreciation charged @10% p.a. as per straight line method
- Depreciation for the year ending 31-3-2018 will be calculated as follows:
Depreciation = (Cost of furniture - Residual value) * Depreciation rate
Cost of furniture = Rs.2,00,000
Residual value = 0
Depreciation rate = 10% p.a.
Depreciation for the year = (2,00,000 - 0) * 10% = Rs.20,000
Balance Sheet:
Furniture:
- Furniture as on 1-4-2017 = Rs.4,40,000
- Furniture sold on 31-12-2017 = Rs.40,000 (book value)
- Furniture purchased on 1-10-2017 = Rs.2,00,000
- Depreciation charged for the year = Rs.20,000
- Furniture as on 31-3-2018 will be calculated as follows:
Furniture as on 31-3-2018 = Furniture as on 1-4-2017 + Furniture purchased on 1-10-2017 - Furniture sold on 31-12-2017 - Depreciation charged for the year
Furniture as on 31-3-2018 = 4,40,000 + 2,00,000 - 40,000 - 20,000
Furniture as on 31-3-2018 = Rs.6,80,000
Conclusion:
In the Income and Expenditure Account, the profit on sale of furniture and depreciation on furniture will be shown. In the Balance Sheet, the value of furniture as on 31-3-2018 will be calculated by considering the furniture as on 1-4-2017, furniture purchased during the year, furniture sold during the year and depreciation charged during the year.
Income and Expenditure Account:
Profit on Sale of Furniture:
- The furniture was sold at a profit of 10% on 31st Dec.2017
- The profit on sale of furniture will be calculated as follows:
Profit on sale = Sales price - Book value
Book value = Rs.40,000
Sales price = Rs.44,000 (10% profit on book value)
Profit on sale of furniture = Rs.4,000
Depreciation on Furniture:
- Furniture purchased on 1-10-2017 for Rs.2,00,000
- Depreciation charged @10% p.a. as per straight line method
- Depreciation for the year ending 31-3-2018 will be calculated as follows:
Depreciation = (Cost of furniture - Residual value) * Depreciation rate
Cost of furniture = Rs.2,00,000
Residual value = 0
Depreciation rate = 10% p.a.
Depreciation for the year = (2,00,000 - 0) * 10% = Rs.20,000
Balance Sheet:
Furniture:
- Furniture as on 1-4-2017 = Rs.4,40,000
- Furniture sold on 31-12-2017 = Rs.40,000 (book value)
- Furniture purchased on 1-10-2017 = Rs.2,00,000
- Depreciation charged for the year = Rs.20,000
- Furniture as on 31-3-2018 will be calculated as follows:
Furniture as on 31-3-2018 = Furniture as on 1-4-2017 + Furniture purchased on 1-10-2017 - Furniture sold on 31-12-2017 - Depreciation charged for the year
Furniture as on 31-3-2018 = 4,40,000 + 2,00,000 - 40,000 - 20,000
Furniture as on 31-3-2018 = Rs.6,80,000
Conclusion:
In the Income and Expenditure Account, the profit on sale of furniture and depreciation on furniture will be shown. In the Balance Sheet, the value of furniture as on 31-3-2018 will be calculated by considering the furniture as on 1-4-2017, furniture purchased during the year, furniture sold during the year and depreciation charged during the year.
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Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.?
Question Description
Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.?.
Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Furniture as on 1-4-2017 Rs.4,40,000, furniture (book value on 1-4-2017 Rs.40,000) sold at a profit of 10% on 31st Dec.2017. Furniture purchased on 1-10-2017 for Rs.2,00,000, charged depreciation @10% p.a. as per straight line method. How will you treat the above while preparing Income and Expenditure Account and Balance Sheet as on 31-3-2018.?.
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