Bon Company has decided to expand its operations and has purchased land in the city for construction of a new manufacturing plant. The following costs were incurred: Land purchase price 2,500,000 Payment of delinquent property taxes 100,000 Title search and insurance 50,000 Option paid for an alternative land which was not acquired Cost of relocating informal settlers Special assessment for city improvements on water and sewer system Contract cost of new building 30,000 5,000 150,000 7,000,000 200,000 Architect fee Building permit Cost to destroy existing building on land (P10,000 worth of salvaged Material used in new building) 30,000 60,000 Excavation before new construction 110,000 Fire insurance on building – 1 year 40,000 The cost of the land and building should, respectively be

Bon Company has decided to expand its operations and has purchased land in the city for construction of a new manufacturing plant. The following costs were incurred: Land purchase price 2,500,000 Payment of delinquent property taxes 100,000 Title search and insurance 50,000 Option paid for an alternative land which was not acquired Cost of relocating informal settlers Special assessment for city improvements on water and sewer system Contract cost of new building 30,000 5,000 150,000 7,000,000 200,000 Architect fee Building permit Cost to destroy existing building on land (P10,000 worth of salvaged Material used in new building) 30,000 60,000 Excavation before new construction 110,000 Fire insurance on building – 1 year 40,000 The cost of the land and building should, respectively be

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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