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Mode 6- Lump Sum Acquisition, With Direct Attributable Cost Numbers 14 and 15 On June 1. Thick Company acquired a real property by issuing 35,360 shares of its P100 par value ordinary shares. The shares were selling on the same date at P125. A mortgage of P4,000,000 was assumed by Thick on the purchase. Moreover, the company paid P180,000 of real property taxes in the prior years. Twenty percent of the purchase price should be allocated to the land and the balance to the building. In order to make the building suitable for the use of Thick, remolding costs had to be incurred in the amount of P900,000. This however necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P30,000. Parking lot cost the company P320,000 while repairs in the main hall were incurred at P45,000 prior to its use. 10) The correct cost of the land should be A 1.664,000 B. 1.720,000 C. 2,040,000 D. 2.400,000 11) The correct cost of the building should be A 6,330,000 B. 7.795,000 C. 7,750,000 D. 7,570,000

Mode 6- Lump Sum Acquisition, With Direct Attributable Cost Numbers 14 and 15 On June 1. Thick Company acquired a real property by issuing 35,360 shares of its P100 par value ordinary shares. The shares were selling on the same date at P125. A mortgage of P4,000,000 was assumed by Thick on the purchase. Moreover, the company paid P180,000 of real property taxes in the prior years. Twenty percent of the purchase price should be allocated to the land and the balance to the building. In order to make the building suitable for the use of Thick, remolding costs had to be incurred in the amount of P900,000. This however necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P30,000. Parking lot cost the company P320,000 while repairs in the main hall were incurred at P45,000 prior to its use. 10) The correct cost of the land should be A 1.664,000 B. 1.720,000 C. 2,040,000 D. 2.400,000 11) The correct cost of the building should be A 6,330,000 B. 7.795,000 C. 7,750,000 D. 7,570,000

FINANCIAL ACCOUNTING
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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Mode 6- Lump Sum Acquisition, With Direct Attributable Cost Numbers 14 and 15 On June 1. Thick Company acquired a real property by issuing 35,360 shares of its P100 par value ordinary shares. The shares were selling on the same date at P125. A mortgage of P4,000,000 was assumed by Thick on the purchase. Moreover, the company paid P180,000 of real property taxes in the prior years. Twenty percent of the purchase price should be allocated to the land and the balance to the building. In order to make the building suitable for the use of Thick, remolding costs had to be incurred in the amount of P900,000. This however necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P30,000. Parking lot cost the company P320,000 while repairs in the main hall were incurred at P45,000 prior to its use. 10) The correct cost of the land should be A 1,664,000 B. 1.720,000 C. 2,040,000 D. 2,400,000 11) The correct cost of the building should be A 6,330,000 B. 7.795,000 C. 7,750,000 D. 7,570,000
Transcribed Image Text:Mode 6- Lump Sum Acquisition, With Direct Attributable Cost Numbers 14 and 15 On June 1. Thick Company acquired a real property by issuing 35,360 shares of its P100 par value ordinary shares. The shares were selling on the same date at P125. A mortgage of P4,000,000 was assumed by Thick on the purchase. Moreover, the company paid P180,000 of real property taxes in the prior years. Twenty percent of the purchase price should be allocated to the land and the balance to the building. In order to make the building suitable for the use of Thick, remolding costs had to be incurred in the amount of P900,000. This however necessitated the demolition of a portion of the building, which resulted in recovery of salvage material sold for P30,000. Parking lot cost the company P320,000 while repairs in the main hall were incurred at P45,000 prior to its use. 10) The correct cost of the land should be A 1,664,000 B. 1.720,000 C. 2,040,000 D. 2,400,000 11) The correct cost of the building should be A 6,330,000 B. 7.795,000 C. 7,750,000 D. 7,570,000
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