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On July 1, 2000, Ashok Ltd purchased a machine for Rs. 1,08,000 and spent Rs 12,000 on its installation. At the time of purchase, it was estimated that the effective commercial life of the machine will be 12 years and after 12 years its salvage value will be Rs 12,000. Prepare Machine account and Depreciation account in the books of Ashok Ltd. For the first three years, if depreciation is written off according to the straight-line method. The accounts are closed December 31st, every year. |
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Answer» On July 1, 2000, Ashok Ltd purchased a machine for Rs. 1,08,000 and spent Rs 12,000 on its installation. At the time of purchase, it was estimated that the effective commercial life of the machine will be 12 years and after 12 years its salvage value will be Rs 12,000. Prepare Machine account and Depreciation account in the books of Ashok Ltd. For the first three years, if depreciation is written off according to the straight-line method. The accounts are closed December 31st, every year. |
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