Darshan Ltd. purchased a Machinery on 1st April, 2016 for ` 130 lakhs (Useful life is 4Years). Government grant received is ` 40 lakhs for the purchase of above Machinery.

Salvage value at the end of useful life is estimated at ` 60 lakhs.

Darshan Ltd. decides to treat the grant as deferred income.

Your are required to calculate the amount of depreciation and grant to be recognized in profit & loss account for the year ending 31st March, 2017,31st March, 2018, 31st March, 2019& 31st March, 2020.

Darshan Ltd. follows straight line method for charging depreciation

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As per 12 Accounting for government grants grants related to depreciable a... View the full answer