Junior Accounting Qualification (China)

Practice session

Company H constructs a production workshop by self-management (自营工程). Expenditures incurred include: purchase of engineering construction materials RMB 500,000 (VAT RMB 65,000), direct labor of construction workers RMB 120,000, trial production run net cost RMB 30,000, and building safety inspection fee RMB 10,000. The facility reaches its intended usable state on October 31. What is the capitalized initial cost of the production workshop?

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