(a) A Company purchased a machinery on Magh 1, 2076 for Rs. 90,000 and spent Rs. 10,000 on its installation. The company writes off depreciation at…
BBS Financial Accounting and Analysis · 2079 · Solved Question with Answer
(a) A Company purchased a machinery on Magh 1, 2076 for Rs. 90,000 and spent Rs. 10,000 on its installation. The company writes off depreciation at 15% on the diminishing value every year. At the end of Ashwin 2078, the company sold the machinery at Rs. 80,000 and purchased new machinery for Rs. 120,000. The books are closed on 31st Chaitra every year.
Required: Machinery account for 2076 to 2078
(b) Define depreciation. Write in brief about the reasons for depreciating long-lived assets.