Acquisition of Personal computers.
Difficulty level: Normal.
On July 1st 20XX,
Mr Hussnain acquired 10 computer system having a list price of Rs. 140,400 each from “Qualitative computers”. following are the other transactions related to this acquisition.
Mr Hussnain acquired 10 computer system having a list price of Rs. 140,400 each from “Qualitative computers”. following are the other transactions related to this acquisition.
- Sales tax @ 17% included in list price (refundable).
- Trade discount allowed@ 10%.
- Cash discount allowed@ 5% if final payment was made before 25th July.
- Transportation charges Rs.5000.
- Insurance (In-transit) Rs.12000.
- Installation charges Rs.600 each.
- Mr hussnain also signed a maintenance contract for 2 years. The computers will be provided monthly service from qualitative computers for Rs.200 per annum.
REQUIRED:
Compute the cost that should be capitalised in the books of Mr Hussnain.
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