At the beginning of the current year, EZE Company reported land P3,200,000 and building P7,500,000. During the current year, the following transactions occurred: A piece of land was acquired for P1,600,000. To be able to acquire the land, P200,000 was paid to a real estate agent, and P100,000 was incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P75,000 A second piece of land with a building was acquired for P5,400,000. The appraiser valued the land at P2,000,000 and the building at P1,000,000. Shortly after acquisition, the building was demolished at a cost of P100,000. A new building was constructed at a cost of P5,000,000 plus excavation fee P80,000, architect fee P120,000 and building permit P70,000.

At the beginning of the current year, EZE Company reported land P3,200,000 and building P7,500,000. During the current year, the following transactions occurred: A piece of land was acquired for P1,600,000. To be able to acquire the land, P200,000 was paid to a real estate agent, and P100,000 was incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P75,000 A second piece of land with a building was acquired for P5,400,000. The appraiser valued the land at P2,000,000 and the building at P1,000,000. Shortly after acquisition, the building was demolished at a cost of P100,000. A new building was constructed at a cost of P5,000,000 plus excavation fee P80,000, architect fee P120,000 and building permit P70,000.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter18: Accounting For Long-term Assets

Section: Chapter Questions

Problem 6CE

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At the beginning of the current year, EZE Company reported land P3,200,000 and building P7,500,000. During the current year, the following transactions occurred: A piece of land was acquired for P1,600,000. To be able to acquire the land, P200,000 was paid to a real estate agent, and P100,000 was incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P75,000 A second piece of land with a building was acquired for P5,400,000. The appraiser valued the land at P2,000,000 and the building at P1,000,000. Shortly after acquisition, the building was demolished at a cost of P100,000. A new building was constructed at a cost of P5,000,000 plus excavation fee P80,000, architect fee P120,000 and building permit P70,000. A third piece of land was acquired for P2,000,000 and was held for undetermined use. What is the total cost of the building? Group of answer choices 14,670,000 14,570,000 12,870,000 12,770,000
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