Furniture And Fixtures Purchased And Sold Journal Entries

Furniture & Fixtures (which are Fixed Assets / Non Current Assets) are purchased and sold journal entries depend upon the use of these Assets whether these are purchased to use in the office or purchased for resale purpose as it is the main business’s product to sell on daily basis to its customers. These are debits in trial balance as these have favorable balance on debit side of T-Account.

1. When Furniture & Fixtures Purchased or Sold for Office Use

In that case, we purchase furniture & fixtures for use in the office as a fixed asset to carry on the daily routine of the business’days.

The journal entry for purchase of new furniture & fixtures of Rs. 500000 is shown below:

                                              Furniture & Fixtures a/c  500000

                                                                                     Cash a/c  500000

                                                      (Furniture & Fixtures Purchased For Cash)

For the Sale of old Furniture previously used in the business, there may be either a Gain, Loss or a break even point (no gain no loss situation).

Let’s us say that the company sold furniture for Rs. 7000, then the entry of Disposal or Sale is shown below:-

Accumulated Depreciation - Furniture & Fixtures a/c  450000

Cash a/c  7000

                                                     Furniture & Fixtures a/c  500000

                                                     Gains on Disposal of Furniture & Fixtures a/c  2000

                                              (Gain on Sale or Disposal of Furniture & Fixtures)

If furniture & fixtures purchased by check / cheque, then we replace the cash account with bank account. Similarly, if the furniture & fixtures purchased on account, then cash is replaced with Accounts Payable Account / Creditor Account as shown below:

                                     Furniture & Fixtures a/c  500000

                                                                           Accounts Payable a/c  500000

                                                        (Furniture & Fixtures Purchased On Credit)

Similarly, if furniture & fixtures sold by cheque / check, then cash account is replaced with bank account and if on account, then cash account is replaced with Accounts Receivable / Debtors Account as shown below:

                                 Furniture & Fixtures a/c  500000

                                                                      Accounts Receivable a/c  500000

                                                      (Furniture & Fixtures Sold On Credit)

2. When Furniture & Fixtures Purchased or Sold For Resale Purposes

In that case, furniture and fixtures are considered as Goods Purchased or Goods Sold for the business as these are purchased and sold for resale purposes and not to use in the business. So, Purchases Account And Sales Account is created for such kind of business.

For purchase of furniture & fixtures for cash / bank or account, the journal entries are shown below:

For Cash / Cheque or Check

                                                     Purchases a/c  500000

                                                                           Cash a/c /Bank a/c  500000

                                                           (Goods Purchased For Cash / Bank)

On Account / Credit

                                                 Purchases a/c 500000

                                                                       Accounts Payable a/c  500000

                                                           (Goods Purchased On Account)

In the case of Sale of furniture & fixtures that is the daily routine of the business to sell to its customers, then the entry to record is shown below:

For Cash / bank / Cheque or Check

                                               Cash a/c / Bank a/c  500000

                                                                               Sales a/c  500000

                                                            (Goods Sold For Cash / bank)

On Credit or Account

                                           Accounts Receivable a/c  500000

                                                                                   Sales a/c  500000

                                                              (Goods Sold On Account)

So, these are the purchase and sale of furniture and fixtures which purchased or sold either for using in the business or for resale purposes or it is the daily business of the company to sale and purchase furniture & fixtures to its customers.