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Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. Installation expenses were Rs. 10,000. Its residual value after 10 year is Rs.5,000. On 1-03-2019 expenses on its repairs were incurred to the extent?
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Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. In...
Calculation of Depreciation


  • Total cost of the machine = Rs. 1,20,000 + Rs. 10,000 = Rs. 1,30,000

  • Residual value of the machine after 10 years = Rs. 5,000

  • Useful life of the machine = 10 years

  • Depreciation per year = (Total cost - Residual value) / Useful life

  • Depreciation per year = (Rs. 1,30,000 - Rs. 5,000) / 10 = Rs. 12,500



Expenses on Repairs


  • Expenses on repairs are revenue expenditures and are not capitalized like installation expenses.

  • Hence, expenses on repairs are not added to the cost of the machine.

  • Expenses on repairs are recorded as an expense in the Income Statement.

  • The amount of expenses on repairs cannot be determined from the given information.

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Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. In...
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Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. Installation expenses were Rs. 10,000. Its residual value after 10 year is Rs.5,000. On 1-03-2019 expenses on its repairs were incurred to the extent?
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Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. Installation expenses were Rs. 10,000. Its residual value after 10 year is Rs.5,000. On 1-03-2019 expenses on its repairs were incurred to the extent? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. Installation expenses were Rs. 10,000. Its residual value after 10 year is Rs.5,000. On 1-03-2019 expenses on its repairs were incurred to the extent? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Ambuja Cement Ltd. purchased a machine on 1-1-2019 for Rs.1,20,000. Installation expenses were Rs. 10,000. Its residual value after 10 year is Rs.5,000. On 1-03-2019 expenses on its repairs were incurred to the extent?.
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