Direction (Q41. to Q45.): From the trail balance and other information provided by school for the year ended 31st March 2017 answer the questions:
| Debit Balance | Amount (₹) | Credit Balance | Amount (₹) |
|---|---|---|---|
| Building | 6,25,000 | Admissions fees | 12,500 |
| Furniture | 1,00,000 | Tuition fees received | 5,00,000 |
| Library Books | 1,50,000 | Creditors for supplies | 15,000 |
| Investment @12% | 5,00,000 | Rent for the school hall | 10,000 |
| Salaries | 5,00,000 | Miscellaneous receipts | 30,000 |
| Stationery | 40,000 | Government grant | 3,50,000 |
| General expenses | 18,000 | General fund | 10,00,000 |
| Sports expenses | 15,000 | Donation for library books | 62,500 |
| Cash at bank | 50,000 | Sale of old furniture | 20,000 |
| Cash in hand | 2,000 | ||
| 20,00,000 | 20,00,000 |
Additional Information
(a) Tuition fee yet to be received for the yar are 25,000
(b) Salaries yet to be paid amount to ₹30,000
(c) Furniture costing 40,000 was purchased on October 1,2016.
(d) The book value of the furniture sold was 50,000 on April 1, 2016
(e) Depreciation is to he charged @ 10% p.a. on furniture, 15% p.a. on Library books, and 5% on building.
Questions: Loss on sale of furniture is
Correct Answer :
₹30,000
Solution :
The correct answer is ₹30,000.
Step-by-Step Explanation:
To find the loss on the sale of furniture, we need to compare the book value of the sold furniture with the actual proceeds received from its sale.
1. Identify the Book Value of the Furniture Sold:
According to the additional information point (d), the book value of the furniture that was sold was ₹50,000 on April 1, 2016 (at the beginning of the financial year).
2. Identify the Sale Value:
From the Credit Balance column of the Trial Balance, the cash received from the sale of old furniture is listed as ₹20,000.
3. Calculate the Loss on Sale:
The loss is calculated by subtracting the sale proceeds from the book value of the furniture on the date of sale:
Substituting the given values into the formula:
Therefore, the loss incurred by the school on the sale of old furniture during the year is ₹30,000.
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