Firm purchased machinery worth rs.230000 and spend rs.15000 on its installation. Its expected useful life is 5 years when its scrap value will be rs.45000. What is the amount annual depreciation?
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Annual Depreciation =
[ (cost of the asset+installation expenses) - scrap value ] ÷ life of the asset
[(2,30,000+15,000) - 45,000] / 5
(2,45,000-45,000)/ 5
2,00,000/5
Rs. 40,000
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