A major electronics company has acquired a green field site to build a new factory. The land costs £1.5 million, together with professional fees of £100,000. The site requires remedial work costing £500,000 on old mine shafts before any building can commence. The company plans a massive advertising drive to promote the factory and to recruit skilled personnel. An initial package of £400,000 has been agreed with their advertising agents for this purpose. How much of this expenditure will be regarded as an expense in the income statement (profit and loss account) A) 500,000 B) 100,000 C) 900,000 D) 400,000 What is the cost of the land in the companies statement of financial position (balance sheet) A) 1.5m B) 1.6m C) 2.1m D) 2.0m

A major electronics company has acquired a green field site to build a new factory. The land costs £1.5 million, together with professional fees of £100,000. The site requires remedial work costing £500,000 on old mine shafts before any building can commence. The company plans a massive advertising drive to promote the factory and to recruit skilled personnel. An initial package of £400,000 has been agreed with their advertising agents for this purpose. How much of this expenditure will be regarded as an expense in the income statement (profit and loss account) A) 500,000 B) 100,000 C) 900,000 D) 400,000 What is the cost of the land in the companies statement of financial position (balance sheet) A) 1.5m B) 1.6m C) 2.1m D) 2.0m

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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