Panay Company purchased land as a factory site for P2,400,000. The entity paid P240,000 to tear down a building on the land. Salvage materials was sold for P20,000. Legal fee of P15,000 was paid for title investigation and making the purchase. Architect fee was P125,000. Excavation amounted to P40,000. The contractor was paid P8,800,000. A special assessment made by the city for pavement was P30,000. Interest incurred during construction was P300,000. The entity installed lighting and signage at a cost of P50,000. 5.1 What is the cost of the land? __________ 5.2 What is cost of the building? ___________

The land is purchased at a fixed sum, and the costs of preparing the site for construction are…

Answered: Panay Company purchased land as a…

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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Panay Company purchased land as a factory site for P2,400,000. The entity paid P240,000 to tear down a building on the land. Salvage materials was sold for P20,000. Legal fee of P15,000 was paid for title investigation and making the purchase. Architect fee was P125,000. Excavation amounted to P40,000. The contractor was paid P8,800,000. A special assessment made by the city for pavement was P30,000. Interest incurred during construction was P300,000. The entity installed lighting and signage at a cost of P50,000.

5.1 What is the cost of the land? __________

5.2 What is cost of the building? ___________

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