Isabela Company commercial operations at the beginning of the current year. The following costs are incurred by the entity during the current year: Option fee for land acquired Option fee for land not acquired 10, 000 10, 000 Taxes in arrears on building on land Payment for land Demotion of old building on land, net of salvage of P10, 000 50, 000 1, 000, 000 100, 000 Architect fee 230, 000 Payment to city hall for approval of building construction Contract price for factory building 120, 000 5, 000, 000 Safety fence around construction site 35, 000 Safety inspection on building Removal of safety fence after completion of factory building New fence surrounding the factory 30, 000 20, 000 80, 000 Driveways, parking bays and safety lighting a. How much is the cost of Land?_ 550, 000 b. How much is the cost of factory building?_

Isabela Company commercial operations at the beginning of the current year. The following costs are incurred by the entity during the current year: Option fee for land acquired Option fee for land not acquired 10, 000 10, 000 Taxes in arrears on building on land Payment for land Demotion of old building on land, net of salvage of P10, 000 50, 000 1, 000, 000 100, 000 Architect fee 230, 000 Payment to city hall for approval of building construction Contract price for factory building 120, 000 5, 000, 000 Safety fence around construction site 35, 000 Safety inspection on building Removal of safety fence after completion of factory building New fence surrounding the factory 30, 000 20, 000 80, 000 Driveways, parking bays and safety lighting a. How much is the cost of Land?_ 550, 000 b. How much is the cost of factory building?_

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 77DC

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Isabela Company commercial operations at the beginning of the current year. The followingcosts are incurred by the entity during the current year:Option fee for land acquired 10, 000Option fee for land not acquired 10, 000Taxes in arrears on building on land 50, 000Payment for land 1, 000, 000Demotion of old building on land, net of salvage of P10, 000 100, 000Architect fee 230, 000Payment to city hall for approval of building construction 120, 000Contract price for factory building 5, 000, 000Safety fence around construction site 35, 000Safety inspection on building 30, 000Removal of safety fence after completion of factory building 20, 000New fence surrounding the factory 80, 000Driveways, parking bays and safety lighting 550, 000a. How much is the cost of Land?________________________b. How much is the cost of factory building?___________________________c. what is the rules in solving this problem?
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