Q.On 1st April 2022, a firm purchased furniture for ₹50,000. Depreciation is to be charged at 10% per annum by the Written Down Value Method. Prepare the Furniture Account for three years ending 31st March 2023, 2024 and 2025.

Under WDV, each year's 10% is calculated on the previous year's closing balance, not on the original ₹50,000.

Step 1 — Depreciation each year (10% on the reducing book value).

• Year 1 (2022-23): 10% of 50,000 = ₹5,000. Closing book value = 50,000 − 5,000 = ₹45,000.
• Year 2 (2023-24): 10% of 45,000 = ₹4,500. Closing book value = 45,000 − 4,500 = ₹40,500.
• Year 3 (2024-25): 10% of 40,500 = ₹4,050. Closing book value = 40,500 − 4,050 = ₹36,450.

Step 2 — Furniture Account.

For the year ending 31st March 2023:

For the year ending 31st March 2024:

For the year ending 31st March 2025:

Verification: the depreciation figures 5,000 → 4,500 → 4,050 are each exactly 10% of the immediately preceding closing balance, confirming the WDV pattern of a falling annual charge on a fixed rate.

Applying 10% to the original cost (₹50,000) every year instead of to the reducing book value — this is actually the SLM calculation, not WDV, and gives the wrong (constant ₹5,000) figure for years 2 and 3.