a) Prepare Machi
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:X purchased a secondhand machinery on 1-2-2018 for Ro.50,000 paid Ro.11,000 for its
overhauling and Ro.5,000 for its installation which was completed by 31-3-2018.The
company provides depreciation on its machinery at 15% per annum on diminishing
balance method from the date it is use and closes its books on December 31 every year. On
1-10-2019 a repair work was carried out on the machine and Ro.5,000 were paid for the
same. The machine was sold on 31-10-1995 for a sum of Ro.11,000 and an amount of
Ro.1000 was paid as dismantling charges.
a) Prepare Machinery Account from 2018 to 2020.
b) Name the method that assumes that an asset should be depreciated more in the
earlier years and less in later years of use.
c) Did the Machine have any salvage value?
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