Diana Company is now a growing company. An acquisition of land and construction of a new building was undertaken. The following information relates to the scenario: Land, at purchase price, P700,000 Legal fees related to land purchase, P45,000 Full construction cost of the new building, P5,780,000 Professional fees paid to the architect, P100,000 Sale of scrap materials from the old building previous situated in the land, P60,000 Demolition cost of old building for the construction of the new building, P90,000 How much is the cost of land? Cost of building? Note: is Sale of Scrap Materials from the old building previous situated in the land under “Land” or “Building” - why? If what is given is “sale of scrap from old building” - that is under “Land” cost or “Building” cost?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Diana Company is now a growing company. An acquisition of land and construction of a new building was undertaken. The following information relates to the scenario:

Land, at purchase price, P700,000

Legal fees related to land purchase, P45,000

Full construction cost of the new building, P5,780,000

Professional fees paid to the architect, P100,000

Sale of scrap materials from the old building previous situated in the land, P60,000

Demolition cost of old building for the construction of the new building, P90,000

How much is the cost of land? Cost of building?

Note: is Sale of Scrap Materials from the old building previous situated in the land under “Land” or “Building” - why? If what is given is “sale of scrap from old building” - that is under “Land” cost or “Building” cost? 

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