Old Room Co. purchased land and building for a lump-sum price of $48,000,000. Theexisting building will be demolished and a new building will be constructed. OldRoom incurred the following additional costs:Title guarantee80,00024,000Option paid for the land and old building acquiredPayments to tenants to vacate premises48,000Cost of razing the old building240,000Construction cost of new building (completed)34,000,000The land and old building have fair values of $20,000,000 and $40,000,000,respectively.• Some salvaged wood planks from the demolition were used as wall panels inthe new building. Old Room estimates that the salvaged wood planks have afair value of $120,000. The other salvaged materials were sold for $60,000.How much are the allocated costs of the land and the new building?16,864,000 (Land)33,780,000 (New Building)16,104,000 (Land)34,180,000 (New Building)15,980,000 (Land)36,670,000 (New Building)16,104,000 (Land)34,810,000 (New Building)

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Old Room Co. purchased land and building for a lump-sum price of $48,000,000. The existing building will be demolished and a new building will be constructed. Old Room incurred the following additional costs: Title guarantee 80,000 Option paid for the land and old building acquired 24,000 Payments to tenants to vacate premises 48,000 Cost of razing the old building 240,000 Construction cost of new building (completed) 34,000,000 • The land and old building have fair values of P20,000,000 and $40,000,000, respectively. • Some salvaged wood planks from the demolition were used as wall panels in the new building. Old Room estimates that the salvaged wood planks have a fair value of P120,000. The other salvaged materials were sold for $60,000. How much are the allocated costs of the land and the new building? 16,864,000 (Land) 33,780,000 (New Building) 16,104,000 (Land) 34,180,000 (New Building) 15,980,000 (Land) 36,670,000 (New Building) 16,104,000 (Land) 34,810,000 (New Building)

Old Room Co. purchased land and building for a lump-sum price of $48,000,000. The existing building will be demolished and a new building will be constructed. Old Room incurred the following additional costs: Title guarantee 80,000 Option paid for the land and old building acquired 24,000 Payments to tenants to vacate premises 48,000 Cost of razing the old building 240,000 Construction cost of new building (completed) 34,000,000 • The land and old building have fair values of P20,000,000 and $40,000,000, respectively. • Some salvaged wood planks from the demolition were used as wall panels in the new building. Old Room estimates that the salvaged wood planks have a fair value of P120,000. The other salvaged materials were sold for $60,000. How much are the allocated costs of the land and the new building? 16,864,000 (Land) 33,780,000 (New Building) 16,104,000 (Land) 34,180,000 (New Building) 15,980,000 (Land) 36,670,000 (New Building) 16,104,000 (Land) 34,810,000 (New Building)

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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