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 total cost of land should be reported under property, plant and equipment?Group of answer choices10,625,0008,725,00010,425,0008,625,000

Property, plant and equipment is the non current assets that is reported in the balance sheet of the…

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

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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 total cost of land should be reported under property, plant and equipment?

Group of answer choices

10,625,000

8,725,000

10,425,000

8,625,000

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