Q.1 A company has purchased a large items of plants. The following costs were incurred. List price of the machine 1,000,000 Trade discount given Delivery cost Installation cost Expected Useful life 50,000 100,000 125,000 4 years Cost of site preparation 200,000 Architect's fees 15,000 Administrative expense 150,000 Cost of site preparation 200,000 Expected Residual value Zero Local Govt. Officials have granted the company a license to operate the asset on condition that the company will remove the asset and return the site to its former condition at the end of the asset's life. The company has recognized a liability of Rs.250,000 in respect of the expected clearance cost. You are required to: a) Calculate the cost of machine b) Prepare necessary journal entries for 4 years and c) Prepare necessary accounts