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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?

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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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?
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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