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CMA Intermediate · Financial Accounting · Financial Statements of Not-for-Profit Organisations

Lotus Cultural Society had furniture of Rs 1,20,000 on 1 April 2025. Its Receipts and Payments Account shows purchase of furniture Rs 40,000 during the year and sale of old furniture (book value Rs 10,000) for Rs 6,000. Depreciation for the year is Rs 12,000 in total. What amount of furniture appears in the closing Balance Sheet?

The closing furniture is Rs 1,38,000. Opening Rs 1,20,000 plus purchases Rs 40,000, less the book value of the sold furniture Rs 10,000, less depreciation Rs 12,000. The sale proceeds are not deducted from the asset; the Rs 4,000 loss goes to Income and Expenditure.

  1. ARs 1,38,000Correct
  2. BRs 1,42,000
  3. CRs 1,34,000
  4. DRs 1,48,000

Explanation

Closing furniture = 1,20,000 + 40,000 - 10,000 (book value of sold item) - 12,000 depreciation = 1,38,000. The loss of Rs 4,000 on sale goes to Income and Expenditure. Using sale proceeds 6,000 instead of book value gives 1,42,000.

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