1.

On July 1, 2010, Ashwani purchased a machine for Rs 2,00,000 on credit. Installation expenses Rs 25,000 are paid by cheque. The estimated life is 5 years and its scrap value after 5 years will be Rs 20,000. Depreciation is to be charged on the straight-line basis. Show the journal entry for the year 2010 and prepare necessary ledger accounts for the first three years.

Answer»

On July 1, 2010, Ashwani purchased a machine for Rs 2,00,000 on credit. Installation expenses Rs 25,000 are paid by cheque. The estimated life is 5 years and its scrap value after 5 years will be Rs 20,000. Depreciation is to be charged on the straight-line basis. Show the journal entry for the year 2010 and prepare necessary ledger accounts for the first three years.



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