Books of ekta shows on 1st jan 2006 furntiure rs. 20000/-. during the year Part of the furniture whose book value on 1st jan 2006 is rs. 1200 has been exchanged with another furniture by paying additional cost rs. 500/- ekta charge depreciation @ 10% p.a.. the net amount of the furniture to be shown in the balance sheet will be.
please provide complete working note.
thanks
For purchase of new asset the entry would be (Para 11, AS 10)
New Furniture A/c Dr. 1700
To Cash A/c 500
To Old furniture 1200
Assuming that this transaction took place on 1st jan 2006 depreciation for the whole year will be:
10% on (Rs. 20000-1200+1700) = 2050
Net amount of furniture to be shown in closing B/S will be:
opening bal 20000
less: sold 1200
add: purchased 1700
20500
less: depreciation
on above @ 10% 2050
net closing figure 18450
thanks
CAclubindia
