On 1st January 2020 Suma purchased Furniture for ₹ 80,000. Depreciation is to be provided annually at 10% under straight line method. On 31st December 2022 furniture was sold for ₹ 40,000. Show the Furniture Account assuming that the books are closed on 31st December every year.

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> [!TLDR]
> Under the straight line method depreciation is fixed at 10% of cost = ₹8,000 every year. After three years (2020, 2021, 2022) the book value falls from ₹80,000 to ₹56,000. The furniture is sold for ₹40,000, so the loss on sale = 56,000 − 40,000 = ₹16,000.
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> This is a standard AP Inter 2nd-year (Commerce) depreciation-and-disposal question, following the NCERT/CBSE-aligned commerce method.
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> Depreciation each year = 10% of ₹80,000 = ₹8,000 (fixed under SLM).
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> **Furniture Account**
>
> | Date | Particulars | ₹ | Date | Particulars | ₹ |
> | --- | --- | --- | --- | --- | --- |
> | 2020 Jan 1 | To Bank A/c | 80,000 | 2020 Dec 31 | By Depreciation A/c | 8,000 |
> | | | | 2020 Dec 31 | By Balance c/d | 72,000 |
> | | **Total** | **80,000** | | **Total** | **80,000** |
> | 2021 Jan 1 | To Balance b/d | 72,000 | 2021 Dec 31 | By Depreciation A/c | 8,000 |
> | | | | 2021 Dec 31 | By Balance c/d | 64,000 | …

Q.On 1st January 2020 Suma purchased Furniture for ₹ 80,000. Depreciation is to be provided annually at 10% under straight line method. On 31st December 2022 furniture was sold for ₹ 40,000. Show the Furniture Account assuming that the books are closed on 31st December every year.

Concept understanding — Accounting for Depreciation and Disposal of an Asset

Date	Particulars	₹	Date	Particulars	₹
2020 Jan 1	To Bank A/c	80,000	2020 Dec 31	By Depreciation A/c	8,000
			2020 Dec 31	By Balance c/d	72,000
	Total	80,000		Total	80,000
2021 Jan 1	To Balance b/d	72,000	2021 Dec 31	By Depreciation A/c	8,000
			2021 Dec 31	By Balance c/d	64,000

Q.On 1st January 2020 Suma purchased Furniture for ₹ 80,000. Depreciation is to be provided annually at 10% under straight line method. On 31st December 2022 furniture was sold for ₹ 40,000. Show the Furniture Account assuming that the books are closed on 31st December every year.

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