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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows – 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, ½ was one year old and ½ was 2 years old.  Purchases are made on 1st January.
 
Q.Closing Balance in Glass, Cutlery A/c = ________.
  • a)
    Rs 18,000
  • b)
    Rs 18,500
  • c)
    Rs 19,800
  • d)
    Rs 20,400
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutle...
Given Information:
- Balance on 01.01.2004 is Rs 28,000.
- Purchases during the year is Rs 16,000.
- Depreciation is to be charged on the assets as follows:
- 1/5th of their values in the year of purchase.
- 2/5th in each of the next 2 years.
- Stock of Glass, Cutlery, etc. as on 01.01.2004:
- One year old.
- Two years old.
- Purchases are made on 1st January.

To Find:
Closing Balance in Glass, Cutlery A/c.

Solution:
1. Calculate the value of assets on 01.01.2004.
- Original value = Balance on 01.01.2004 + Purchases during the year.
- Original value = Rs 28,000 + Rs 16,000 = Rs 44,000.

2. Calculate the depreciation for the year of purchase.
- Depreciation in the year of purchase = 1/5 * Original value.
- Depreciation in the year of purchase = 1/5 * Rs 44,000 = Rs 8,800.

3. Calculate the value of assets at the end of the year of purchase.
- Value at the end of the year of purchase = Original value - Depreciation in the year of purchase.
- Value at the end of the year of purchase = Rs 44,000 - Rs 8,800 = Rs 35,200.

4. Calculate the depreciation for the next two years.
- Depreciation in each of the next 2 years = 2/5 * Value at the end of the year of purchase.
- Depreciation in each of the next 2 years = 2/5 * Rs 35,200 = Rs 14,080.

5. Calculate the value of assets at the end of the first year.
- Value at the end of the first year = Value at the end of the year of purchase - Depreciation in the next year.
- Value at the end of the first year = Rs 35,200 - Rs 14,080 = Rs 21,120.

6. Calculate the value of assets at the end of the second year.
- Value at the end of the second year = Value at the end of the first year - Depreciation in the next year.
- Value at the end of the second year = Rs 21,120 - Rs 14,080 = Rs 7,040.

7. Calculate the closing balance in the Glass, Cutlery A/c.
- Closing Balance = Value at the end of the second year + Stock of Glass, Cutlery, etc. as on 01.01.2004.
- Closing Balance = Rs 7,040 + Rs 28,000 + Rs 16,000 = Rs 51,040.

Conclusion:
The closing balance in the Glass, Cutlery A/c is Rs 51,040.
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Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Closing Balance in Glass, Cutlery A/c = ________.a)Rs 18,000b)Rs 18,500c)Rs 19,800d)Rs 20,400Correct answer is option 'C'. Can you explain this answer?
Question Description
Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Closing Balance in Glass, Cutlery A/c = ________.a)Rs 18,000b)Rs 18,500c)Rs 19,800d)Rs 20,400Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Closing Balance in Glass, Cutlery A/c = ________.a)Rs 18,000b)Rs 18,500c)Rs 19,800d)Rs 20,400Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Glass, Cutlery etc. : Balance on 01.01.2004 is Rs 28,000. Glass, Cutlery, etc. purchased during the year Rs 16,000. Depreciation is to be charged on the above assets as follows 1/5th of their values is to be written off in the year of purchase and 2/5th in each of the next 2 years. Of the stock of Glass, Cutlery, etc. as on 01.01.2004, was one year old and was 2 years old. Purchases are made on 1st January.Q.Closing Balance in Glass, Cutlery A/c = ________.a)Rs 18,000b)Rs 18,500c)Rs 19,800d)Rs 20,400Correct answer is option 'C'. Can you explain this answer?.
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