Question

3. Amit Ltd. purchased an asset on 01 01.2003 for Rs.
1,20,000. Installation expenses were Rs. 10,000.
Residual value after 5 years Rs. 5,000. On
01.07.2003, expenses for repairs were incurred to
the extent of Rs. 2,000. Depreciation is provided
under straight line method. Depreciation rate =
10%. Annual Depreciation =​

Answer 1

Answer:

Any expenses incurred at the time of purchasing an asset then the asset till put to use all the expenses were added at purchase prices and capitalize the other expenses into it so here all the expenses were added in purchase cost

120000+10000-5000+2000=127000

annual depreciation is 127000/5= 25,400.