PRC-1 · Chapter 7 · Question 94 of 100
A retailer imports goods. The invoice price is Rs. 500,000. A trade discount of 10% is applied. Import duties are Rs. 15,000. Refundable sales tax is Rs. 8,000. What is the correct capitalized cost of this inventory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 465,000
Explanation
Cost = List price (500k) - Trade discount (50k) + Non-refundable import duties (15k) = 465,000. Refundable taxes (8k) are excluded from the cost.
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