Question

1 The company bought 10 acres of land at 1,000,000 Baht per acre. The land has a building 2 worth 500,000 Baht for which it paid separately. The building was used as a factory. Upon the 13 pur chase, the company bought 5,000,000 Baht for machine. It later found out that the land 14 has oil worth 100,000,000 Baht that could be exploited. It has a license to exploit this year. 5 The company acquired a copy right from a famous writer who died this year. It paid 200,000 6Baht for the copy right to print and sell books on "how to run a successful business." 17 10 te 8 (A) In what statement and why should the company report each transaction? How & How much? 9 (B) What type of expense does each transaction have and how it should be treated in which 20 21 22 23 " . statement? How& how much? Answer both question with appropriate format, calculation, and amount in the applicable financial statement(s) line-by-line. Sheet1 | Sheet2 Sheet3 : 2

Answer 1

A.
1	Bought Land for 1000000 Baht
	The Entry	Debit	Credit
	Land A/C	1000000
	To Bank A/C		1000000
	To Be shown Under Balance Sheet under Prpoerty Plant & Equipment
2	Bougt Building to used as Factory for 500000 Baht
	Factory Building A/C	500000
	To Bank A/C		500000
	To Be shown Under Balance Sheet under Prpoerty Plant & Equipment
3	Bought a Machine for 5000000 Baht
	Plant & Machinery A/C	5000000
	To Bank A/C		5000000
	To Be shown Under Balance Sheet under Prpoerty Plant & Equipment
4	Purchase Copy Right from Writer
	Copy Right A/C	200000
	To Bank A/C		200000
	To be shown under Balance Sheet Under Goodwill and other Intangible Assets
5	Exploration License for 1000000 should not accounted for in Balance Sheet as it has no
	acquisition cost
	Balance Sheet ( Partial )
	PROPERTY ,PLANT & EQUIPMENT
	Building	500000
	Plant & Machinery	5000000
	Land	1000000
	Gross Property Plant & Equipement	6500000
	Less: Accumulated Depreciation
	Net Property Plant & Equipment	6500000
	Goodwill and Other Intangible Assets
	Copy Rights	200000
B	All Expenditure are capital expenditure mentioned in the question and to be shown on
	Asset side of Balance Sheet.