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Lawrence Ltd purchased a plant and incur following cost at 01 January 2020

Purchase price	700,000
Sale tax refundable (17%)	51,000
Income Tax non-refundable	40,000
Import duties - non-refundable	60,000
Installment Cost	10,000
Fuel (incurred while transporting the plant to the factory)	80,000
Administration costs	15,000
Staff party to celebrate the acquisition of the new plant	20,000
Staff training	40,000
Testing to ensure plant fully operational before start of production	33,000
Proceeds from sale of samples and by-products that were produced during testing	16,000
Advertising of the amazing widgets to be produced by the new plant	38,000
Initial operating loss	20,000

Useful life of the plant is 10 years with 100,000 residual value. Requirement

• Calculate the cost at which plant is capitalized according to IAS-16 (Explain the reason of exclusion and inclusion of Cost). (2 Marks)
• Discuss accounting treatment, the company shall follow for the year 2020 to 2025 (Show all necessary workings and Journal entries). (2 Marks)
• If Company decided to sale the plant at 01 January 2026, What should be the accounting treatment of disposal in following cases (Show all necessary workings and entries). (2 Marks)

1. Disposal proceed 750,000

Disposal proceed 350,000

SYNTHETIC UMITED The following are the summarized accounts of SYNTHETIC LIMITED Statement of financial position at 31 December 2019 2020 . .000.000.000 ASSETS Noncurrent Pin and 2.300 1.38 3.467 Cum Tradec 733 Totale 678 EQUITY AND LIABILITIES Capital 4200 4.500 Bhorer 800 900 Accminind prote 435 1.150 Cumentai 133 312 90 Totally and TIS 7.540 Statement of comprehensive income (strate) for the yw ended 31 December 2020 F.000 Profit before anation Income 310 1.071 Net profit for the period Nota 1 Accumulated proti Rs.1000 Balance at 1 431 Not profit for the you 1071 Divided for the you Balance at 31 December 1.150 Further information () Plant and spent with a coming out of 14.000 dead of for.30.000, Whilst www.tom ofan was purchased for 12.000 Futes and line with a carrying out of Rs.100.000 were deposed of for 105.000 Depreciation cogid on fire and fittings unted to 350.000 4 Dividend for the year was declared during the ye. Dividend payable in the statements of francia portionatach year and relate to difende declared that you but not paid ever to shareholders by the reporting de Prepare the Statement of Cash Flow Using indirect Method