Acquisition of water filtration plant.
Difficulty level: Normal.
ABC (Limited) acquired a water filtration plant from XYZ (Limited) having a list price of Rs.585,000 on 1st Jan 20XX. Following are the details related to this acquisition.
- Sales tax(Refundable) 17% already included in the list price.
- Trade discount allowed @ 2%.
- Further 2% two percent cash discount were also allowed if the payment had been made by 31st January.
- Transportation and insurance (In-transit) were Rs.3,000 and Rs.800 respectively.
- Installation charges were 15000.
- Full and final payment were made on 28th Jan 20XX.
Required:
a). Determine the cost of water filtration plant that should be capitalised in the books of ABC Limited on 1st Jan 20XX.
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