Q.1 Frazil Company purchased a machine on July 01, 2001 at a list price of Rs.60,000 with a trade discount at 5%. The credit terms were 2/10, n/30. The payment was made within discount period. The company incurred the following additional expenditure. 1.5% 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 M-10 a) Compute the cost of Machine b) Compute Depreciation expense for the year ended on December 31, 2001 and December 31, 2002 using straight line method assuming that the machine was estimated to have an operating life of 10 years and a scrap value of Rs10,153. c) The machine is Trade in for a similar one on July 1, 2003. The trade in allowance was agreed at Rs. 60,000. The cost of new machine was Rs. 1,50,000