Question
ABC Ltd needs to set up an effluent treatment plant in its premises. The cost of the equipment is Rs.10 lakh, additional cost include cost
ABC Ltd needs to set up an effluent treatment plant in its premises. The cost of the equipment is Rs.10 lakh, additional cost include cost of transportation of Rs. 2 lakh, customs duty of Rs. 1 lakh and installation expense of Rs. 1lakh. Rs. 2 lakh is required to clear the premises for the purpose of installation while experts charge a consultancy fee of Rs. 1.5 lakh. The factory rent is Rs.2 lakh and the treatment plant occupies 10% of the space. Six months after installation, maintenance work on the machine required an expense of Rs. 50,000. Calculate the cost at which the plant should be carried in the balance sheet.
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