CA Inter P1 · Chapter 13 · Question 1 of 10
Case: Manav Ltd sends goods to its branch at cost plus 25%. During the year, goods invoiced at ₹5,00,000 were sent. The loading included in the goods sent is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹1,00,000
Explanation
If cost is 100, invoice price is 125 and loading is 25, i.e. 25/125 = 1/5 of invoice price. Loading = 5,00,000 x 1/5 = ₹1,00,000. Applying 25% directly to the invoice price (1,25,000) uses the wrong base; 4,00,000 is the cost of the goods sent.
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