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Construction of extension to current working Electrical work with useful life of 10 years On January 1, 2020. Lazarus Company reported the following property, plant and equipment and transactions during the current year: 1,500,000 4,000,000 500,000 a. Land site number 621 was acquired for P3,000,000. Land Building Leasehold improvements Additionally, to acquire the land the entity paid a P60,000 commission to a real estate agent. Cost of P15,000 was incurred to clear the land for the intended use but not to make room for the construction of a new building. During the course of clearing the land, timber and gravel were recovered and sold for P5,000. b. A second tract of land site number 622 with a building was acquired for P4,000,000. The closing statement indicted that the land fair value was P2,500,000 and the building fair value was P1,500,000. Shortly after acquisition, the building was demolished at a cost of P300,000 to make room for the construction of new building. C. A third tract of land site number 623 was acquired for P2,000,000 and was classified as held for sale. d. Extensive work was done to a building occupied by the a 01, 2026. The total cost of the work was P1,250,000 which consisted of the following: Painting of ceiling 100,000 350,000 Construction ofextension to current working area with useful life of 15 years 800,000

Construction of extension to current working Electrical work with useful life of 10 years On January 1, 2020. Lazarus Company reported the following property, plant and equipment and transactions during the current year: 1,500,000 4,000,000 500,000 a. Land site number 621 was acquired for P3,000,000. Land Building Leasehold improvements Additionally, to acquire the land the entity paid a P60,000 commission to a real estate agent. Cost of P15,000 was incurred to clear the land for the intended use but not to make room for the construction of a new building. During the course of clearing the land, timber and gravel were recovered and sold for P5,000. b. A second tract of land site number 622 with a building was acquired for P4,000,000. The closing statement indicted that the land fair value was P2,500,000 and the building fair value was P1,500,000. Shortly after acquisition, the building was demolished at a cost of P300,000 to make room for the construction of new building. C. A third tract of land site number 623 was acquired for P2,000,000 and was classified as held for sale. d. Extensive work was done to a building occupied by the a 01, 2026. The total cost of the work was P1,250,000 which consisted of the following: Painting of ceiling 100,000 350,000 Construction ofextension to current working area with useful life of 15 years 800,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Construction of extension to current working Electrical work with useful life of 10 years property, plant and equipment and transactions during the entity under a lease agreement that expires on December On January 1, 2020. Lazarus Company reported the following property, plant and equipment and transactions during the current year: Land Building Leasehold improvements 1,500,000 4,000,000 500,000 Land site number 621 was acquired for P3,000,000. а. Additionally, to acquire the land the entity paid a P60,000 commission to a real estate agent. Cost of P15,000 was incurred to clear the land for the intended use but not to make room for the construction of a new building. During the course of clearing the land, timber and gravel were recovered and sold for P5,000. b. A second tract of land site number 622 with a building was acquired for P4,000,000. The closing statement indicted that the land fair value was P2,500,000 and the building fair value was P1,500,000. Shortly after acquisition, the building was demolished at a cost of P300,000 to make room for the construction of new building. C. A third tract of land site number 623 was acquired for P2,000,000 and was classified as held for sale. U. Extensive work was done to a building occupied by the a consisted of the following: Painting of ceiling Electrical work with useful life of 10 years 100,000 350,000 800,000 area with useful life of 15 years i the extension to the current working are. 741 CS Scanned with CamScanner
Transcribed Image Text:Construction of extension to current working Electrical work with useful life of 10 years property, plant and equipment and transactions during the entity under a lease agreement that expires on December On January 1, 2020. Lazarus Company reported the following property, plant and equipment and transactions during the current year: Land Building Leasehold improvements 1,500,000 4,000,000 500,000 Land site number 621 was acquired for P3,000,000. а. Additionally, to acquire the land the entity paid a P60,000 commission to a real estate agent. Cost of P15,000 was incurred to clear the land for the intended use but not to make room for the construction of a new building. During the course of clearing the land, timber and gravel were recovered and sold for P5,000. b. A second tract of land site number 622 with a building was acquired for P4,000,000. The closing statement indicted that the land fair value was P2,500,000 and the building fair value was P1,500,000. Shortly after acquisition, the building was demolished at a cost of P300,000 to make room for the construction of new building. C. A third tract of land site number 623 was acquired for P2,000,000 and was classified as held for sale. U. Extensive work was done to a building occupied by the a consisted of the following: Painting of ceiling Electrical work with useful life of 10 years 100,000 350,000 800,000 area with useful life of 15 years i the extension to the current working are. 741 CS Scanned with CamScanner
incurred to improve leased office space. The related lease will terminate on December 31, 2022 and is not expected f The new building on the second tract of land was was e. During December 2020, an amount of P650,000 to be renewed. f: The new building on the second tract of land He constructed for P5,000,000 plus the following costs: 50,000 150,000 40,000 500,000 Excavation fee Architectural design fee Building permit Imputed interest on funds used during construction 1. What total cost of land should be reported on December 31, 2020 under property, plant and equipment? а. 7,070,000 b. 7,060,000 с. 7,370,000 d. 7,000,000 2. What total cost of building should be reported on December 31, 2020? a. 9,000,000 b. 9,540,000 c. 9,240,000 d. 9,490,000 3. What total cost of leasehold improvements should be reported on December 31, 2020? a. 2,300,000 b. 1,250,000 с. 1,900,000 d. 1,500,000 CS Scanned with CamScanner
Transcribed Image Text:incurred to improve leased office space. The related lease will terminate on December 31, 2022 and is not expected f The new building on the second tract of land was was e. During December 2020, an amount of P650,000 to be renewed. f: The new building on the second tract of land He constructed for P5,000,000 plus the following costs: 50,000 150,000 40,000 500,000 Excavation fee Architectural design fee Building permit Imputed interest on funds used during construction 1. What total cost of land should be reported on December 31, 2020 under property, plant and equipment? а. 7,070,000 b. 7,060,000 с. 7,370,000 d. 7,000,000 2. What total cost of building should be reported on December 31, 2020? a. 9,000,000 b. 9,540,000 c. 9,240,000 d. 9,490,000 3. What total cost of leasehold improvements should be reported on December 31, 2020? a. 2,300,000 b. 1,250,000 с. 1,900,000 d. 1,500,000 CS Scanned with CamScanner
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