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A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will be
- a)Rs. 3,500
- b)Rs. 3,700
- c)Rs. 4,000
- d)Rs. 3,400
Correct answer is option 'B'. Can you explain this answer?
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A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap v...
Calculation of Depreciation:
- The cost of furniture is Rs. 5,200.
- The scrap value is Rs. 200.
- The life of the furniture is 10 years.
To calculate the depreciation using the fixed installment method, we will use the formula:
Depreciation per year = (Cost of asset - Scrap value) / Life of asset
Depreciation per year = (5,200 - 200) / 10 = Rs. 500
Calculation of Balance of Furniture A/C at the end of the Third Year:
- The depreciation per year is Rs. 500.
- We need to calculate the balance of the furniture account at the end of the third year.
Depreciation for the first year = Rs. 500
Depreciation for the second year = Rs. 500
Depreciation for the third year = Rs. 500
Accumulated depreciation at the end of the third year = Depreciation for the first year + Depreciation for the second year + Depreciation for the third year
Accumulated depreciation at the end of the third year = Rs. 500 + Rs. 500 + Rs. 500 = Rs. 1,500
Balance of furniture account at the end of the third year = Cost of asset - Accumulated depreciation at the end of the third year
Balance of furniture account at the end of the third year = Rs. 5,200 - Rs. 1,500 = Rs. 3,700
Therefore, the balance of the furniture account at the end of the third year will be Rs. 3,700, which corresponds to option 'B'.
- The cost of furniture is Rs. 5,200.
- The scrap value is Rs. 200.
- The life of the furniture is 10 years.
To calculate the depreciation using the fixed installment method, we will use the formula:
Depreciation per year = (Cost of asset - Scrap value) / Life of asset
Depreciation per year = (5,200 - 200) / 10 = Rs. 500
Calculation of Balance of Furniture A/C at the end of the Third Year:
- The depreciation per year is Rs. 500.
- We need to calculate the balance of the furniture account at the end of the third year.
Depreciation for the first year = Rs. 500
Depreciation for the second year = Rs. 500
Depreciation for the third year = Rs. 500
Accumulated depreciation at the end of the third year = Depreciation for the first year + Depreciation for the second year + Depreciation for the third year
Accumulated depreciation at the end of the third year = Rs. 500 + Rs. 500 + Rs. 500 = Rs. 1,500
Balance of furniture account at the end of the third year = Cost of asset - Accumulated depreciation at the end of the third year
Balance of furniture account at the end of the third year = Rs. 5,200 - Rs. 1,500 = Rs. 3,700
Therefore, the balance of the furniture account at the end of the third year will be Rs. 3,700, which corresponds to option 'B'.
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Community Answer
A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap v...
Depreciation =5200-200÷10=500
balance is 5200-500=4700-500=4200-500=3700
balance is 5200-500=4700-500=4200-500=3700
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A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will bea)Rs. 3,500b)Rs. 3,700c)Rs. 4,000d)Rs. 3,400Correct answer is option 'B'. Can you explain this answer?
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A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will bea)Rs. 3,500b)Rs. 3,700c)Rs. 4,000d)Rs. 3,400Correct answer is option 'B'. 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 A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will bea)Rs. 3,500b)Rs. 3,700c)Rs. 4,000d)Rs. 3,400Correct answer is option 'B'. 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 A trader purchased furniture on Jan 1, 2015 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will bea)Rs. 3,500b)Rs. 3,700c)Rs. 4,000d)Rs. 3,400Correct answer is option 'B'. Can you explain this answer?.
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