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Question - On July 01, 2018, Ashok Ltd. purchased a machine for 1,08,000 and spent 12,000 on its installation. At the time of purchase it was estimated that the effective commercial life of the machine will be 12 years and after 12 years its salvage value will be 10,000.
Prepare machinery account and depreciation Account in the books of Ashok Ltd. for first three years, ending 31st Dec every year, if depreciation is written off at 10% according to straight line method.
Prepare the appropriate entries for January 1, 2012 and December 31, 2012.
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