Question 3

Atoz Sdn. Bhd. has the following information related to its inventory of embroidered baseball caps for the year ended 30^th June 2017:

Purchase price : RM450,000

Import duties : 5% on purchase price

Transportation cost : RM12,500

Loan obtained : RM200,000 (obtained on 1^st April 2017)

Interest on loan : 10% per year

Required:

Determine the cost of Atozs inventory as at 30^th June 2016.

Explain whether the interest on loan is included in the computation of Atozs inventory as per your answer in (a)