On April 1, 20x1, ESCULENT EDIBLE Co. purchased land and building by paying ₱40,000,000 and assuming a mortgage of ₱8,000,000. The land and building have appraised values of ₱20,000,000 and ₱40,000,000, respectively. The building will be used by ESCULENT Co. as its new office. Additional costs relating to the purchase include the following: Legal cost of conveying and registering title to land ₱32,000 Payment to tenants to vacate premises 36,000 Option paid on the land and building 24,000 Option paid on similar land and building not acquired 12,000 Broker's fee on the land and building 60,000 Unpaid real estate taxes prior to April 1, 20x1 assumed by ESCULENT Co. - assessed on land 120,000 Real estate taxes after April 1, 20x1 80,000 Repairs and renovation costs before the building is occupied 160,000 Repair costs after the building is occupied 200,000   * How much is the cost of the land? a. 16,192,000 b. 17,292,000 c. 15,492,000 d. 14,592,000   * How much is the cost of the building? a. 23,420,000 b. 32,640,000 c. 32,240,000 d. 24,440,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On April 1, 20x1, ESCULENT EDIBLE Co. purchased land and building by paying ₱40,000,000 and assuming a mortgage of ₱8,000,000. The land and building have appraised values of ₱20,000,000 and ₱40,000,000, respectively. The building will be used by ESCULENT Co. as its new office.

Additional costs relating to the purchase include the following:

Legal cost of conveying and registering title to land

₱32,000

Payment to tenants to vacate premises

36,000

Option paid on the land and building

24,000

Option paid on similar land and building not acquired

12,000

Broker's fee on the land and building

60,000

Unpaid real estate taxes prior to April 1, 20x1 assumed

by ESCULENT Co. - assessed on land

120,000

Real estate taxes after April 1, 20x1

80,000

Repairs and renovation costs before the building

is occupied

160,000

Repair costs after the building is occupied

200,000

 

* How much is the cost of the land?

a. 16,192,000 b. 17,292,000 c. 15,492,000 d. 14,592,000

 

* How much is the cost of the building?

a. 23,420,000 b. 32,640,000 c. 32,240,000 d. 24,440,000

 

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