Leni Company incurred the following costs during the current year: 10,000 10,000 Option fee for land acquired Option fee for land not acquired Taxes in arrears on building on land Payment for land Demolition of old building, net of salvage of P10,000 50,000 1,000,000 100,000 230,000 120,000 Architect fee Payment to city hall for approval of building construction Contract price for factory building Safety fence around construction site Safety inspection on building Removal of safety fence after completion of building New fence surrounding the factory Driveways, parking bays and safety lighting 5,000,000 35,000 30,000 20,000 80,000 550,000 What is the cost of land and building, respectively? (Format of answer should be LAND: 1234567; BUILDING: 1234567)

Leni Company incurred the following costs during the current year: 10,000 10,000 Option fee for land acquired Option fee for land not acquired Taxes in arrears on building on land Payment for land Demolition of old building, net of salvage of P10,000 50,000 1,000,000 100,000 230,000 120,000 Architect fee Payment to city hall for approval of building construction Contract price for factory building Safety fence around construction site Safety inspection on building Removal of safety fence after completion of building New fence surrounding the factory Driveways, parking bays and safety lighting 5,000,000 35,000 30,000 20,000 80,000 550,000 What is the cost of land and building, respectively? (Format of answer should be LAND: 1234567; BUILDING: 1234567)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 33BE: Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a...

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Expenditures After Acquisition Listed below are several transactions: a. Paid $80 cash to replace a minor part of an air conditioning system. b. Paid $40,000 to fix structural damage to a building. c. Paid $8,000 for monthly salaries. d. Paid $12,000 to replace a manual cutting machine with a computer-controlled machine. e. Paid $1,000 related to the annual painting of a building. Required: Classify each transaction as either a revenue expenditure, a capital expenditure, or neither.
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?
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 Taxes in arrears on building on land Payment for land Demotion of old building on land, net of salvage of P10, 000 10, 000 10, 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 Safety fence around construction site Safety inspection on building Removal of safety fence after completion of factory building New fence surrounding the factory 120, 000 5, 000, 000 35, 000 30, 000 20, 000 80, 000 Driveways, parking bays and safety lighting a. How much is the cost of Land? b. How much is the cost of factory building? 550, 000
Biliran Company incurred the following costs at the beginning of the current year: Cost of land 1,000,000 Cost of building Remodelling and repairs prior to occupancy 4,000,000 500,000 Escrow fee 100,000 Clearing, levelling and landfill Property tax for period prior to acquisition Real estate commission 250,000 150,000 300,000 What is the cost of building? a. 4,500,000 b. 4,740,000 C. 4,800,000 d. 4,940,000
Roberto Company purchased a P4,000,000 tract of land as an investment property. The entity razed an old building on the property. Demolition of old building Proceeds from sale of salvaged materials Legal fees for purchase contract and recording ownership Title guarantee insurance Payment of property taxes in arrears Option paid for an alternative land not acquired Special assessment for city improvements 200,000 20,000 150,000 50,000 100,000 30,000 120,000 What is the cost of the land? A. 4,600,000 B. 4,420,000 C. 4,480,000 D. 4,500,000
BCareful incurred the following expenditures in 2020: Purchase of land P15,600,000 Land survey 208,000 Fees for search of title for land 24,000 Building construction permit fee 140,000 Temporary quarters for construction workers 430,000 Payments to tenants of the old building 184,000 Cost to raze the old building 940,000 Excavation of land 400,000 Special assessment of the government for road projects 80,000 Dividends that should have been earned had the money used for construction been invested in equity instruments 200,000 Damages awarded to injuries sustained in construction where no insurance is carried 336,000 Cost of construction 78,000,000 Cost of paving parking lot, driveway and sidewalks 1,600,000 Profit on construction, as the difference between the appraised value of the asset after construction and actual costs incurred 1,900,000 List price of machinery and equipment purchased…
BCareful incurred the following expenditures in 2020: Purchase of land P15,600,000 Land survey 208,000 Fees for search of title for land 24,000 Building construction permit fee 140,000 Temporary quarters for construction workers 430,000 Payments to tenants of the old building 184,000 Cost to raze the old building 940,000 Excavation of land 400,000 Special assessment of the government for road projects 80,000 Dividends that should have been earned had the money used for construction been invested in equity instruments 200,000 Damages awarded to injuries sustained in construction where no insurance is carried 336,000 Cost of construction 78,000,000 Cost of paving parking lot, driveway and sidewalks 1,600,000 Profit on construction, as the difference between the appraised value of the asset after construction and actual costs incurred 1,900,000 List price of machinery and equipment purchased…
Tacloban Company incurred the following costs at the beginning of the current year: cost of land, P1,000,000; cost of building, P4,000,000; remodeling and repairs prior to occupancy, P500,000; escrow fee, P100,000; clearing, leveling and landfill, P250,000; property tax for period prior to acquisition, P150,000; real estate commission P300,000. What is the cost of the building?
Write CAPITALIZED if the subsequent cost incurred SHALL FORM PART of the carrying amount of the PPE or EXPENSED OUTRIGHT if the subsequent cost incurred SHALL NOT FORM PART of the carrying amount of the PPE. Acquired safety equipment to be attached for one of the production equipment for P 150,000 as required by new law. Acquired five new machineries for new P 800,000 each. Rearranged the production PPEs in Factory A for P 500,000 to make it more presentable before the management team visits the factory. Rearranged the production PPEs in Factory B for P 400,000 to accommodate a newly purchased equipment that will make the production process faster and more efficient. Repaired one of the machineries for P 350,000 as part of factory’s annual examination. Repaired another machinery for P 275,000 to prolong its remaining useful life from five years to seven years. Replaced a significant part of a production equipment for P 900,000. The equipment has an original cost of P 4,000,000 and…
At the beginning of current year, Apple Company purchased a plating machine for P5,400,000. The entity received a government grant of P400,000 toward this capital cost. The machine is to be depreciated on a 20% reducing balance basis over 10 years. The estimated residual value is P200,000. Required: Prepare journal entries for the current year, assuming the grant is accounted for as: a. Deferred income b. Deduction from asset
Investment Property Determine the cost of the following items of investment acquired by Sasha Corporation during 2022; Land site for capital appreciation was acquired for P8,600,000. The company paid P430,000 commission to a real estate agent. Costs of P 135,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P 65,000. The cost of investment property is _____________ Land and building were acquired to be held for under operating leases. The company made a de payment of P4,000,000, issued 20,000 P200 par ordinary shares with a market price of P240 per share, and issued a three-year non-interest-bearing note for P6,000.000 note is payable in equal annual installments of P2,000,000 at the end of each year from the date of purchase. The prevailing interest rate for similar notes is 10%. 30% of the purchase price is allocated to the land. Investment property is recorded at __________
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