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    Question

    XYZ Ltd. purchases raw materials for ₹5,00,000 and

    pays transportation charges of ₹50,000 and GST of ₹90,000. The GST is recoverable. What amount should be capitalised?
    A ₹6,40,000 Correct Answer Incorrect Answer
    B ₹5,50,000 Correct Answer Incorrect Answer
    C ₹5,90,000 Correct Answer Incorrect Answer
    D ₹6,00,000 Correct Answer Incorrect Answer

    Solution

    Recoverable GST is not capitalised. Capitalised cost = Purchase + Transport = ₹5,50,000.

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