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Trial balance: Furniture ---Rs. 84600 Sale of furniture (1-10-16)--- Rs. 14600 Adjustment: Calculate 5% depreciation on furniture What's the amount of depreciation Note: furniture and sale of furniture is written in trial balance
Answers (7)
Case 1 : If rate of depreciation is simply mentioned as 5%, Depreciation would be â?¹ 4,230 (84,600*5%) and in balance sheet furniture would be shown at â?¹ 65,770 (84,600-14,600-4,230). Case 2 : If rate of depreciation is mentioned as 5% p.a., Depreciation would be â?¹ 3,865 [(14,600*5%*6/12) + (70,000*5%)] assuming accounting year is 1.4.2016 - 31.3.2017 and in balance sheet furniture would be shown at â?¹ 66,135 (84,600-14,600-3,865).
Aditya Raj
Case 1 : If rate of depreciation is simply mentioned as 5%, Depreciation would be â?¹ 4,230 (84,600*5%) and in balance sheet furniture would be shown at â?¹ 65,770 (84,600-14,600-4,230). Case 2 : If rate of depreciation is mentioned as 5% p.a., Depreciation would be â?¹ 3,865 [(14,600*5%*6/12) + (70,000*5%)] assuming accounting year is 1.4.2016 - 31.3.2017 and in balance sheet furniture would be shown at â?¹ 66,135 (84,600-14,600-3,865).
Bothering in case 2 As we sale the furniture then why depreciation is calculated on saleable item?
Aditya Raj
Because, we have sold the furniture on 1st October, 2016 that means we have used the furniture for 6 months in current year and we have to provide depreciation for that period.
But if we do not have that furniture then why we will calculate the depreciation which we already solded We have used it for 6month but then we have sold it so only selling entry will be there na? Am i right?
