Answer to Question #207364 in Accounting for Kkkk

Question

On July 1, 2021, Ria Co. purchased a ₱400,000 tract of land that is interested to be the site of a new office complex. Ria incurred additional cost and realized salvage proceeds during 2021 as follows:

Demolition of the existing building on site 75,000

Legal and other fees to close escrow 12,000

Proceeds from sale of demolition scrap 10,000

Questions:

Based on the above data, answer the following:

1. Assume that the new office building is to be constructed right away, how much is the cost of the land?

2. Assume that the new office building is to be constructed next year, how much is the cost of the land?

Answer 1

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