YTR Ltd build houses and factories. During the year the company’s own staff erected a new office building on a piece of land immediately beside their existing offices. This new building was required because of expansion which had taken place during the year. The costs incurred were as shown in Table 14. 1. State how the cost of this new building should be audited.

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Table 14.1 Costs incurred in building new offices Land - purchased from neighbour Materials bricks, cement, etc. Labour wages paid to employees while engaged upon the office project Depreciation on construction machinery Cost of resurfacing existing car park adjoining offices 90,000 30,000 70,000 10,000 5,000 205,000