Depreciation Question with answer

Shantikunj Company, Rajoli purchased furniture worth Rs.  38,400 and paid Rs. 1,600 for installation charges on 1^st January, 2004.                                        (10)

          On 31^st March every year, the company charged depreciation @ 10% p.a. on original cost.

          On 1^st Oct.2004 the company purchased an additional furniture costing Rs. 24,000.

          The company sold furniture for Rs.  31,500 on 31^st December 2005, which was purchased on 1^st January 2004.

          Company purchased a new furniture worth Rs.  20,000 on 31^st March, 2006.

          You are required to prepare Furniture account and depreciation account for the years 2003-2004, 2004-2005 and 2005-2006.

In the books of Shantikunj Company

Date	Particulars	JF	Amt Rs.	Date	Particulars	JF	Amt Rs.
1-1-04	To Cash / Bank A/c				By Depreciation A/c By Balance c/d		1,000 39,000
			40,000	31-3-04 31-3-04
			40,000				40,000
1-4-04 1-10-04	To balance b/d To Cash / Bank A/c		39,000 24,000	31-3-05 31-3-05	By Depreciation A/c (4000 + 1200) By Balance c/d		5,200 57,800
			63,000				63,000
1-4-05 31-3-06	To balance b/d To Cash / Bank		57,800 20,000	31-12-05 31-12-05 31-12-05 31-3-06 31-3-06	By Cash / Bank A/c By Profit & Loss A/c By Depreciation A/c By Depreciation A/c By Balance c/d		31,500 500 3,000 2,400 40,400
			77,800				77,800
1-4-06	To balance b/d		40,400
			40,400				40,400

Depreciation A/c.

Date	Particulars	JF	Amt Rs.	Date	Particulars	JF	Amt Rs.
31-3-04	To Furniture A/c		1,000	31-3-04	By Profit & Loss A/c		1,000
			1,000				1,000
31-3-05	To Furniture A/c		5,200	31-3-05	By Profit & Loss A/c		5,200
			5,200				5,200
31-12-05	To Furniture A/c To Furniture A/c		3,000 2,400	31-3-06	By Profit & Loss A/c		5,400
			5,400				5,400

Working Note  :-

To find Profit or loss on sale of Furniture

Original cost as on 1-1-04                    40,000

(-) Depreciation           (3 months)           1,000

Book value as on 1-1-04                        39,000

(-) 10% Dep.  (2004 – 05)                          4,000

Book Value as on 1-4-05                        35,000

(-) Depreciation (9 months)                     3,000

Book value as on 31-12-05                   32,000

Less: Selling Price                                 31,500

Loss on Sale                                               500