The Delhi Electric Co. Ltd rebuilt and
re-equipped a part of their power-house at a
cost of Rs. 80,00,000; the part of the old
power-house thus superseded had cost
originally Rs. 50,00,000 but if erected at the
present time would cost 20% more.
Rs. 6,00,000 is realized from the sale of old
materials and Rs. 3,00,000 worth of old
materials are used in the reconstruction and
are included in the cost of Rs. 80,00,000
mentioned above Give necessary entries for
recording the above transactions in the books
of the company, indicating the allocations
between capital and revenue and give
reasons for such allocations
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