How much of this expenditure will be regarded as an expense in the income statement (profit and
Question:
How much of this expenditure will be regarded as an expense in the income statement (profit and loss account)?
(a) £100,000
(b) £400,000
(c) £500,000
(d) £900,000
The following information applies to question.
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.
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