on july 1,2011 ,Ashok ltd. purchased a machine for Rs. 108000 and spent Rs . 12000 on its installation .At the time of purchase it is estimated that its working life is 12 years and after 12 years its salvage value will be Rs.12000. prepare machinery account and depreciation account for first three years by straight line method.

Answer 1

value to be depreciated: 108000-12000 = 96000
12 years to depreciate means 8000/year

see what you can do with that.