Question

The original cost of furniture amounted to Rs.4,000 and it is decided to write off 5% on the cost as Depreciation at the end of each year. Shows the Ledger Account as it will appear during the first four years. Show also how the same account will appear if it was write off 5% on the diminishing balance of the asset each year.

Answer 1

Note: Depreciation p.a 4,000 x 5/100 = 200 p.a

Note : Depreciation p.a = opening balance x 5/100