Question : Furniture as of 1st April, 2019—Rs. 2,20,000; Furniture (having book value as on 1st April, 2019—Rs. 20,000) sold at a gain (profit) of 20% on 31st December, 2019. Furniture purchased on 1st October, 2019 for Rs. 1,00,000; Charge depreciation @ 10% p.a. on furniture. How much the amount is to be shown in the Income and Expenditure Account?
Option 1: Profit Rs 3,700 credited to Income and Expenditure Account. Depreciation charged Rs 26,500 debited to Income and Expenditure Account.
Option 2: Profit Rs.3,700 credited to Income and Expenditure Account Rs.1,500 depreciation debited to Income and Expenditure Account
Option 3: Loss Rs. 3,700 debited to Income and Expenditure Account Rs. 20,000 depreciation debited to Income and Expenditure Account
Option 4: None of the above
Correct Answer: Profit Rs 3,700 credited to Income and Expenditure Account. Depreciation charged Rs 26,500 debited to Income and Expenditure Account.
Solution : FURNITURE ACCOUNT
Working Note: 1. Book Value as on 1/4/19 = 20,000 (-) Depreciation @10% = (1,500) [For 9 months] Book Value as on 31/12/19 = 18,500 (+) Gain (20% x 18,500) = 3,700 Sale = 22,200 2. Total depreciation on all 3 furniture = Rs.1,500 + Rs.25,000 = Rs.26,500. Hence, the correct option is 1.
Question : Furniture as on 31st March, 2019—Rs. 4,40,000; Furniture (having book value as on 1st April, 2019—Rs. 40,000) sold at a loss of 20% on 31st December, 2019. Furniture is to be depreciated @ 10% p.a. Furniture costing Rs. 3,00,000 was also purchased on 1st October, 2019. Calculate the amount of Depreciation and loss on the sale of furniture to be transferred to the Income and Expenditure Account.
Option 1: Loss on sale of furniture Rs 74,000 Depreciation Rs 55,000
Option 2: Loss on sale of furniture Rs 7,400 Depreciation Rs 3,000
Option 3: Loss on sale of furniture Rs 7,400 Depreciation Rs 58,000
Option 4: Depreciation Rs 50,000 Loss on sale of furniture Rs 3,700
Question : Interest received on match fund Investment should be
Option 1: Credited to Income and expenditure account
Option 2: Debited to Income and expenditure account
Option 3: Credited to capital fund
Option 4: Debited to the building fund
Question : On 1st April, 2019, Moonlight Ltd. issued 1,000, 9% Debentures of Rs. 200 each at a discount of 5% redeemable after 5 years at a premium of 10%. All the debentures were subscribed and allotment was made. The balance in Securities Premium Reserve is Rs. 10,000. At the time of writing off the loss on issue of debentures statement of profit and loss account will be debited/credited with ____________.
Option 1: Credited with Rs. 20,000
Option 2: Debited with Rs. 30,000
Option 3: Debited with Rs. 20,000
Option 4: Credited with Rs. 30,000
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