Purchase price of the land and building Fair value: P3,500,000 Land 3,000,000 Old building Historical cost 2,000,000 Land 2,000,000 Old building Demolition costs 6,000,000 700,000 How much should be the amount taken to profit or loss for the year?
Purchase price of the land and building Fair value: P3,500,000 Land 3,000,000 Old building Historical cost 2,000,000 Land 2,000,000 Old building Demolition costs 6,000,000 700,000 How much should be the amount taken to profit or loss for the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 3
On December 31, 2021 MAGANDANGEHEMPLO, Inc. obtained a land with an old building, the
old building is dilapidated and will not be used, that will be accounted for under property, plant and
equipment. The Company intends to demolish the old building, to build a new building. The
following
information relates to the land and building:
Purchase price of the land and building
P3,500,000
Fair value:
Land
3,000,000
Old building
2,000,000
Historical cost
Land
2,000,000
Old building
6,000,000
Demolition costs
700,000
How much should be the amount taken to profit or loss for the year?
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