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KPK Ltd is installing a new plant: supplier's invoice ₹45,00,000; estimated dismantling cost after 5 years ₹3,25,000; initial operating losses before commercial production ₹4,00,000; interest to supplier for deferred credit ₹2,50,000; initial delivery and handling ₹1,85,000; site preparation ₹5,00,000; consultants' fees for advice on acquisition ₹6,75,000. What is the total of the directly attributable costs (excluding the invoice price and the dismantling estimate) that are capitalised under AS 10?
A₹11,75,000
B₹18,60,000
C₹13,60,000
D₹6,75,000
Answer & Solution
Correct answer: C. ₹13,60,000
1. Directly attributable costs here are delivery & handling, site preparation and consultants' fees.
2. These are 1,85,000 + 5,00,000 + 6,75,000.
3. Total = ₹13,60,000 (the invoice ₹45,00,000 and dismantling ₹3,25,000 are counted separately).
_Source: ICAI BoS CA Intermediate Paper 1 (Advanced Accounting), Sept 2025 MCQ — Q.9, AS 10 Property, Plant & Equipment._
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