diff --git a/erpnext/selling/doctype/quotation/test_quotation.py b/erpnext/selling/doctype/quotation/test_quotation.py
index 3f30d05b7d..7bbc11efe0 100644
--- a/erpnext/selling/doctype/quotation/test_quotation.py
+++ b/erpnext/selling/doctype/quotation/test_quotation.py
@@ -32,5 +32,31 @@ class TestQuotation(unittest.TestCase):
 		sales_order.transaction_date = "2013-05-12"
 		sales_order.insert()
 
+	def test_create_quotation_with_margin(self):
+		from erpnext.selling.doctype.quotation.quotation import make_sales_order
+		from erpnext.selling.doctype.sales_order.sales_order \
+			import make_material_request, make_delivery_note, make_sales_invoice
+
+		test_records[0]['items'][0]['price_list_rate'] = 1500
+		test_records[0]['items'][0]['type'] = 'Percentage'
+		test_records[0]['items'][0]['rate_or_amount'] = 20
+		quotation = frappe.copy_doc(test_records[0])
+		quotation.insert()
+
+		self.assertRaises(frappe.ValidationError, make_sales_order, quotation.name)
+		quotation.submit()
+
+		sales_order = make_sales_order(quotation.name)
+		sales_order.delivery_date = "2016-01-02"
+		sales_order.naming_series = "_T-Quotation-"
+		sales_order.transaction_date = "2016-01-01"
+		sales_order.insert()
+		sales_order.submit()
+
+		dn = make_delivery_note(sales_order.name)
+		dn.save()
+
+		si = make_sales_invoice(sales_order.name)
+		si.save()
 
 test_records = frappe.get_test_records('Quotation')