Accounting practice question: Acquisition of Gas oven by Foodwarm.

On july-1st-20XX Foodwarm Dicided to buy a Gas oven for their Bakery from Hussnain Appliances. The list price was Rs. 800,000. Foodwarm was allowed 5% discount on their list price. Hussnain Appliances offered further cash discount of 8% if the balance paid before 25-July-20XX. Foodwarm also incurred the following expenses.
  1. Paid insurance in transit Rs. 5,000.
  2. Paid 7,000 in freight charges.
  3. Foowarm also signed a insurance policy for 3 years at a insurance premium of Rs.1200/ month.
  4. Foodwarm had to construct an specific corner, install gas pipes, and Electric wires at a cost of Rs. 20,000, 7,500, & 2000 respectively.
  5. Paid Rs. 1200 in testing charges.
  6. During the installation one of the grill was damaged, and replaced at a cost of Rs. 3000.
  7. Foodwarm paid the remaining balance on 22-July-20XX.
REQUIRED: Compute the cost of oven for Foodwarm, and record a double entries in their accounts for the said purchase.


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