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Reliance Ltd purchased a second-hand machine for Rs. 56,000 on 1st October 2014 and spent Rs. 28,000 on its overhaul and installation before putting it to operation. It is expected that the machine can be sold for Rs. 5,000 at the end of its useful life of 15 years. Moreover, an estimated account and provision for depreciation account for the first 3 years charging depreciation by fixed installment method. Accounts are closed on 31st december every year. |
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Answer» Reliance Ltd purchased a second-hand machine for Rs. 56,000 on 1st October 2014 and spent Rs. 28,000 on its overhaul and installation before putting it to operation. It is expected that the machine can be sold for Rs. 5,000 at the end of its useful life of 15 years. Moreover, an estimated account and provision for depreciation account for the first 3 years charging depreciation by fixed installment method. Accounts are closed on 31st december every year. |
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