Read each problem carefully and choose the CORRECT answer among the choices. PROBLEM: At the start of the year, the opening balances of Land and Building of Bing Company were P2,200,000 and P6,500,000, respectively. Below are transactions that happened during the current year: 1. A plot of land was purchased for P1,600,000. An amount of P175,000 was paid to a real estate agency to acquire the land, and P30,000 was spent to clear the area. Timber and gravel were salvaged and sold for P25,000 during the cleaning of the site. 2. For P4,500,000, a second plot of land with a building was purchased. The appraiser placed a P2,000,000 value on the land and a P1,000,000 value on the building. The structure was dismantled for P120,000 shortly after the purchase. A new building was built for P5,500,000, plus a P55,000 excavation fee, a P70,000 architect charge, and a P60,000 building permit. 3. A third parcel of property was purchased for P2,000,000 and is being retained for future usage, although, the plan is not clear.

Read each problem carefully and choose the CORRECT answer among the choices. PROBLEM: At the start of the year, the opening balances of Land and Building of Bing Company were P2,200,000 and P6,500,000, respectively. Below are transactions that happened during the current year: 1. A plot of land was purchased for P1,600,000. An amount of P175,000 was paid to a real estate agency to acquire the land, and P30,000 was spent to clear the area. Timber and gravel were salvaged and sold for P25,000 during the cleaning of the site. 2. For P4,500,000, a second plot of land with a building was purchased. The appraiser placed a P2,000,000 value on the land and a P1,000,000 value on the building. The structure was dismantled for P120,000 shortly after the purchase. A new building was built for P5,500,000, plus a P55,000 excavation fee, a P70,000 architect charge, and a P60,000 building permit. 3. A third parcel of property was purchased for P2,000,000 and is being retained for future usage, although, the plan is not clear.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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