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 X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rd of his time for the building construction. The capitalized cost of office building was:
  • a)
    Rs. 10,00,000
  • b)
    Rs. 11,10,000
  • c)
    Rs. 10,90,000
  • d)
    Rs.10,70,000
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
X limited spent Rs. 10,00,000 towards construction of office building....
Calculation of Capitalized Cost of Office Building:

1. Direct Costs:
- Construction cost of office building = Rs. 10,00,000
- Construction cost of temporary store (used for building construction purpose) = Rs. 50,000
- Sale of dismantled store materials = Rs. 20,000
Direct Costs = (10,00,000 + 50,000) - 20,000 = Rs. 10,30,000

2. Indirect Costs:
- Salary paid to Mr. A (supervisor) = Rs. 60,000
- Mr. A devoted 2/3rd of his time for building construction
- Therefore, indirect costs = (60,000 x 3/2) = Rs. 90,000

Capitalized Cost of Office Building = Direct Costs + Indirect Costs
= Rs. 10,30,000 + Rs. 90,000
= Rs. 10,70,000

Therefore, the correct answer is option D) Rs. 10,70,000.
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Community Answer
X limited spent Rs. 10,00,000 towards construction of office building....
= 1000000+50000-20000+ 2/3 of 60000 = 1000000+50000-20000+40000 = 1070000 ans. D is correct
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X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rdof his time for the building construction. The capitalized cost of office building was:a)Rs. 10,00,000b)Rs. 11,10,000c)Rs. 10,90,000d)Rs.10,70,000Correct answer is option 'D'. Can you explain this answer?
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X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rdof his time for the building construction. The capitalized cost of office building was:a)Rs. 10,00,000b)Rs. 11,10,000c)Rs. 10,90,000d)Rs.10,70,000Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rdof his time for the building construction. The capitalized cost of office building was:a)Rs. 10,00,000b)Rs. 11,10,000c)Rs. 10,90,000d)Rs.10,70,000Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rdof his time for the building construction. The capitalized cost of office building was:a)Rs. 10,00,000b)Rs. 11,10,000c)Rs. 10,90,000d)Rs.10,70,000Correct answer is option 'D'. Can you explain this answer?.
Solutions for X limited spent Rs. 10,00,000 towards construction of office building. It also spent Rs. 50,000 towards construction of temporary store and used the store for building construction purpose. On completion of building construction the store was dismantled and the materials were sold for Rs. 20,000. Mr. A, a supervisor was paid Rs. 60,000 as his salary during the period of construction and he devoted 2/3rdof his time for the building construction. The capitalized cost of office building was:a)Rs. 10,00,000b)Rs. 11,10,000c)Rs. 10,90,000d)Rs.10,70,000Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
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