Asura Co. purchased land and building for a lump-sum price of P48,000,000. The existing building will be demolished and a new building will be constructed. Asura incurred the following additional costs: Title guarantee 80,000 Option paid for the land and old building acquired 24,000 Payments to tenants to vacate premises 48,000 Cost of razing the old building 240,000 Construction cost of new building (completed) 34,000,000 The land and old building have fair values of P20,000,000 and P40,000,000, respectively. Some salvaged wood planks from the demolition were used as wall panels in the new building. Asura estimates that the salvaged wood planks have a fair value of P120,000. The other salvaged materials were sold for P60,000. How much is the allocated cost of the old building? Answer:
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- Utica Corporation paid 360,000 to purchase land and a building. An appraisal showed that the land is worth 100,000 and the building is worth 300,000. What cost should Utica assign to the land and to the building, respectively?Kofkans company limited purchased land as a factory site and contracted with Maxtor Construction to construct a factory. Kofkans made the following expenditures related to the acquisition of the land, building, and equipment for the factory. GHCPurchase price of land 1,200,000Demolition and removal of old building 80,000Clearing and grading the land before construction 150,000Various closing costs in connection with acquiring land 42,000Architect’s fee for the plans for the new building 50,000Payments to Maxtor for building construction 3,250,000Equipment purchased 860,000Freight charges on equipment 32,000Trees, plants and other…Old Room Co. purchased land and building for a lump-sum price of ₱48,000,000. The existingbuilding will be demolished and a new building will be constructed. Old Room incurred thefollowing additional costs: Title guarantee 80,000Option paid for the land and old building acquired 24,000Payments to tenants to vacate premises 48,000Cost of razing the old building 240,000Construction cost of new building (completed) 34,000,000 • The land and old building have fair values of ₱20,000,000 and ₱40,000,000, respectively.• Some salvaged wood planks from the demolition were used as wall panels in the new building.Old Room estimates that the salvaged wood planks have a fair value of ₱120,000. The othersalvaged materials were sold for ₱60,000. How much are the allocated costs of the land and the new building?
- Old Room Co. purchased land and building for a lump-sum price of ₱48,000,000. The existingbuilding will be demolished and a new building will be constructed. Old Room incurred thefollowing additional costs: Title guarantee 80,000 Option paid for the land and old building acquired 24,000 Payments to tenants to vacate premises 48,000 Cost of razing the old building 240,000 Construction cost of new building (completed) 34,000,000 The land and old building have fair values of ₱20,000,000 and ₱40,000,000, respectively. • Some salvaged wood planks from the demolition were used as wall panels in the new building. OldRoom estimates that the salvaged wood planks have a fair value of ₱120,000. The other salvagedmaterials were sold for ₱60,000.• The old building is unusable and has an insignificant fair value.How much are the allocated costs of the land and the new building?Land New buildinga. 46,104,000…Samyang Inc. acquired a land and an old unusable building for P7,500,000. Samyang contracted Busan Contractors to construct a new building with a total contract price of P10,850,000. Architect fees paid was P473,000. Samyang incurred costs to demolish the old unusable building of P288,000. Proceeds from scrap materials from the old building was P22,000. How much is the cost of land?Facetious Company incurred the following expenditures related to the construction of a new home office: Purchase price of land and an old apartment building 2,000,000 Fair value of land 1,800,000 Legal fees, including fee for title search 10,000 Payment of land mortgage and related interest due at time of sale 50,000 Payment of delinquent property taxes assumed 20,000 Cost of razing the apartment building 30,000 Grading and drainage on land site 15,000 Architect fee on new building 200,000 Payment to building contractor 8,000,000 Interest cost on specific borrowing during construction 300,000 Payment of medical bills of employees accidentally injured while inspecting building construction 10,000 Cost of paving driveway and parking lot 40,000 Cost of trees, shrubs and other landscaping 55,000 Cost of installing lights in parking lot 5,000 Premium for insurance on building during construction 25,000 Cost of open house party to celebrate opening of building 60,000 1. What is the cost…
- Teradene Corporation purchased land as a factory site and contracted withMaxtor Construction to construct a factory. Teradene mad the followingexpenditures related to the acquisition of the land, building, and equipmentfor the factory. GHCPurchase price of land 1,200,000Demolition and removal of old building 80,000Clearing and grading the land before construction 150,000Various closing costs in connection with acquiring land 42,000Architect’s fee for the plans for the new building 50,000Payments to Maxtor for building construction 3,250,000Equipment purchased 860,000Freight charges on equipment 32,000Trees, plants and other landscaping…Teradene Corporation purchased land as a factory site and contracted with Maxtor Construction to construct afactory. Teradene made the following expenditures related to the acquisition of the land, building, and equipmentfor the factory:Purchase price of the land $1,200,000Demolition and removal of old building 80,000Clearing and grading the land before construction 150,000Various closing costs in connection with acquiring the land 42,000Architect’s fee for the plans for the new building 50,000Payments to Maxtor for building construction 3,250,000Equipment purchased 860,000Freight charges on equipment 32,000Trees, plants, and other landscaping 45,000Installation of a sprinkler system for the landscaping 5,000Cost to build special platforms and install wiring for the equipment 12,000Cost of trial runs to ensure proper installation of the equipment 7,000Fire and theft insurance on the factory for the first year of use 24,000In addition to the above expenditures, Teradene purchased four…Auto purchased a $500,000 tract of land that is intended to be the site of a new office complex. The company incurred additional costs and realized salvage proceeds as follows: Demolilitipn of existing building on site: $75,000 Legal and other fees to close escrow: $15,000 Proceeds from sale of demolition scrap: $10,000 What would be the cost of land? A. $500,000 B. $575,000 C. $580,000 D. $590,000
- Good Influence, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, since the old building is already deemed unusable. The following information relates to the land and building: Purchase price of the land and building P3,500,000 Fair value of the land 3,000,000 Historical cost Land 2,000,000 Old building 6,000,000 Demolition costs 700,000 Which of the following statements are true? Group of answer choices The cost of the new building is P17,100,000 million. The amount of expense to be recognized is P700,000. Which is equal to the demolition costs…Gamjatang Inc. acquired a land and an old unusable building for P7,500,000. Gamjatang contracted Busan Contractors to construct a new building with a total contract price of P10,850,000. Architect fees paid was P473,000. Gamjatang incurred costs to demolish the old unusable building of P288,000. Proceeds from scrap materials from the old building was P22,000. How much is the cost of land?Determining the Cost of an AssetOmar Corporation paid $200,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $550,000. In addition, several other costs were incurred: Legal fees (associated with the purchase of the land) $35,000 Architect fees (associated with the new warehouse) $42,000 Interest on the construction loan (for the new warehouse) $18,000 (a) What value should be assigned to the tract of land? $Answer (b) What value should be assigned to the new warehouse? $Answer