At the beginning of the current year, EZE Company reported land P3,200,000 and building P7,500,000. During the current year, the following transactions occurred:A piece of land was acquired for P1,600,000. To be able to acquire the land, P200,000 was paid to a real estate agent, and P100,000 was incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P75,000 A second piece of land with a building was acquired for P5,400,000. The appraiser valued the land at P2,000,000 and the building at P1,000,000. Shortly after acquisition, the building was demolished at a cost of P100,000. A new building was constructed at a cost of P5,000,000 plus excavation fee P80,000, architect fee P120,000 and building permit P70,000. A third piece of land was acquired for P2,000,000 and was held for undetermined use.What is the total cost of the building?Group of answer choices14,670,00014,570,00012,870,00012,770,000

Explanation: The total cost of the building include the following: Beginning Balance of the Building…

Answered: At the beginning of the current year,…

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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At the beginning of the current year, EZE Company reported land P3,200,000 and building P7,500,000. During the current year, the following transactions occurred:

A piece of land was acquired for P1,600,000. To be able to acquire the land, P200,000 was paid to a real estate agent, and P100,000 was incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P75,000

A second piece of land with a building was acquired for P5,400,000. The appraiser valued the land at P2,000,000 and the building at P1,000,000. Shortly after acquisition, the building was demolished at a cost of P100,000. A new building was constructed at a cost of P5,000,000 plus excavation fee P80,000, architect fee P120,000 and building permit P70,000.

A third piece of land was acquired for P2,000,000 and was held for undetermined use.

What is the total cost of the building?

Group of answer choices

14,670,000

14,570,000

12,870,000

12,770,000

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