Question
A company purchased machinery for ₹20,00,000 on 1st
April 2022. Freight ₹1,00,000, Installation ₹50,000, Trial run expenses ₹30,000, and Loss during trial ₹20,000. Depreciation is 10% on straight line method. What will be depreciation for FY 2022-23?Solution
Capitalized cost = 20,00,000 + 1,00,000 + 50,000 + 30,000 = 21,80,000. Trial loss excluded. Dep = 21,80,000 × 10% = ₹2,18,000
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