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What amount should Siargao capitalize as cost of land? What amount should Siargao capitalize as cost of building?

What amount should Siargao capitalize as cost of land? What amount should Siargao capitalize as cost of building?

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 5: (PPE initial Acquisiton) Siargao Company incurred the following costs in relation to property, plant and equipment: Cash paid for purchase of land 2,500,000 Mortgage assumed on the land purchased, including interest accrued P100,000 Realtor commission Legal fees, realty taxes and documentation expenses Amount paid to relocate persons squatting on the property Cost of tearing down an old building on the land to make room for construction of new building Salvage value of old building demolished Cost of fencing the property Amount paid to contractor for the building constructed Building permit fee Excavation Architect fee Interest that would have been earned had the money used during the period of construction been invested What amount should Siargao capitalize as cost of land? What amount should Siargao capitalize as cost of building? 1,000,000 300,000 50,000 100,000 200,000 50,000 250,000 5,000,000 50,000 50,000 200,000 150,000
Transcribed Image Text:PROBLEM 5: (PPE initial Acquisiton) Siargao Company incurred the following costs in relation to property, plant and equipment: Cash paid for purchase of land 2,500,000 Mortgage assumed on the land purchased, including interest accrued P100,000 Realtor commission Legal fees, realty taxes and documentation expenses Amount paid to relocate persons squatting on the property Cost of tearing down an old building on the land to make room for construction of new building Salvage value of old building demolished Cost of fencing the property Amount paid to contractor for the building constructed Building permit fee Excavation Architect fee Interest that would have been earned had the money used during the period of construction been invested What amount should Siargao capitalize as cost of land? What amount should Siargao capitalize as cost of building? 1,000,000 300,000 50,000 100,000 200,000 50,000 250,000 5,000,000 50,000 50,000 200,000 150,000
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