Question No-03 Supreme Limited purchased a plant and incur following cost at 01 January 2021 Purchase price Sale tax refundable (17%) Income Tax non-refundable Import duties - non-refundable Installment Cost Fuel (incurred while transporting the plant to the factory) Administration costs Staff party to celebrate the acquisition of the new plant Staff training Testing to ensure plant fully operational before start of production Proceeds from sale of samples and by-products that were produced during testing Advertising of the amazing widgets' to be produced by the new plant Initial operating loss 1200,000 204,000 60,000 80,000 20,000 50,000 120,000 50,000 70,000 43,000 56,000 88,000 40,000 Requirement: Useful life of the plant is 07 years with RS 200,000 residual value. Requirement a. Calculate the cost at which plant is capitalized according to IAS-16 (Explain the reason of exclusion and inclusion of Cost). (3 Marks) b. Discuss accounting treatment, the company shall follow for the year 2020 to 2025 (Show all necessary workings and Journal entries). (3 Marks) c. 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). (4 Marks) 1) 11) Disposal proceed 750,000 Disposal proceed 350,000