On June 21, 2021, YY Trading acquired a property intended for future construction of a new building. The following costs were incurred:Acquisition cost of property10,000,000Demolition cost of old building250,000Transfer of title fees, legal fees85,000Surveying fees30,000Scrap metals from demolition proceeds15,000Grading and leveling of land20,000Annual property tax for 2022 paid on Nov. 515,000 As of year-end, the above property was valued at P10,385,000. At what amount was the company's income overstated during the year?Group of answer choices15,00030,0000Cannot be determined.

Ans. Some costs are capitalized in the asset like acquisition cost, demolition cost of old building,…

Answered: Trading acquired a property intended…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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On June 21, 2021, YY Trading acquired a property intended for future construction of a new building. The following costs were incurred:
Acquisition cost of property	10,000,000
Demolition cost of old building	250,000
Transfer of title fees, legal fees	85,000
Surveying fees	30,000
Scrap metals from demolition proceeds	15,000
Grading and leveling of land	20,000
Annual property tax for 2022 paid on Nov. 5	15,000

As of year-end, the above property was valued at P10,385,000. At what amount was the company's income overstated during the year?