DEPRECIATION QUESTION WITH ANSWER


S. Narayan from Mumbai purchased Furniture for his office costing Rs. 1,04,000 on 1st July 1987. Estimated life of the Furniture is 10 years and scrap value Rs. 24,000. The Furniture was sold on 31stDecember 1990 for Rs. 70,000. The accounts are closed on 31st March every year. From the above information prepare Furniture account and Depreciation account for the years 1987, 1988, 1989 and 1990, by charging depreciation under Fixed Instalment Method.

DATE
PARTICULARS
AMOUNT
DATE
PARTICULARS
AMOUNT
1.4.87
To balance b/d
NIL
31.3.88
By depreciation
6000
1.7.87
To cash/ bank ac
104000
31.3.88
By balance c/d
98000


104000


104000
1.4.88
To balance b/d
98000
31.3.89
By depreciation a/c
8000



31.3.89
By balance c/d
90000


98000


98000
1.4.89
To balance b/d
90000
31.3.90
By depreciation a/c
8000



31.3.90
By balance c/d
82000


90000


90000
1.4.90
To balance b/d
82000
31.12.90
By deprecation a/c
6000



31.12.90
By cash/ bank a/c
70000



31.12.90
By profit / loss a/c
6000


82000


82000

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