1. Abu Dhabi Municipality purchased inventory of finished goods from UAE at a cash price of $1,500,000. Related expenditure consists sales tax $45,000, import duties $150,000 and, Cost Insurance and freight (CIF) $75,000 with trade discounts $30,000. The purchase was financed by borrowing $1,500,000 from ADIB bank at 6% for 3 years.

Required:

1. Compute the purchase cost of the inventory. (2 marks)
2. Prepare journal entry to record the purchase price. (1 mark)