High School

We appreciate your visit to Frazil Company purchased a machine on April 01 2001 at a list price of Rs 60000 with a trade discount at 5 The credit terms. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!

Frazil Company purchased a machine on April 01, 2001 at a list price of Rs.60000 with a trade discount at 5%. The credit terms were 2/10, n/30. The payment was not made within discount period. The company incurred the following additional expenditure. 1.4% Sales Tax on the cash price of Machine. 2. Custom duty Rs. 11,000 3. Installation and testing cost Rs. 13,000 4. The Machine was insured against fire and premium paid Rs. 3,500 5. Insurance in transit Rs. 5,000 6. Fright in Rs. 2,500 Required a. Compute the cost of Machine b. Compute the Depreciable cost and Depreciation expense for the year ended 2001 and 2002 using straight line method assuming that the machine was estimated to have an operating life of 10 years and a scrap value of Rs. 2,780.

Answer :

The cost of the machine purchased by Frazil Company is calculated by deducting the trade discount from the list price and adding additional expenses such as sales tax, custom duty, installation and testing cost, insurance premiums, insurance in transit, and freight charges.

The total cost of the machine is determined to be Rs. 94,280. calculate the depreciable cost and depreciation expense, the scrap value is subtracted from the total cost of the machine. Assuming a useful life of 10 years and a scrap value of Rs. 2,780, the depreciable cost is determined to be Rs. 91,500. The annual depreciation expense is calculated as (depreciable cost - scrap value) divided by the useful life, resulting in Rs. 8,572 per year for both 2001 and 2002.

Learn more about purchased here;

https://brainly.com/question/32412874

#SPJ11

Thanks for taking the time to read Frazil Company purchased a machine on April 01 2001 at a list price of Rs 60000 with a trade discount at 5 The credit terms. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!

Rewritten by : Barada