ABC COMPANY commenced operations on January 1, 2022. During the following year, the company acquired a tract of land, demolished the building on the land and built a new factory. Equipment was acquired for the factory and, in September 2023, the plant was ready to commence operations. A gala opening was held on September 18, with the City Mayor opening the factory. The first items were ready for sale on September 25.

During this period, the following cash inflows and outflows occurred:

Payment of options fees While searching for a suitable block of land, ABC placed an option to buy with three real estate agents at a cost of P1,250 each P 3,750

Receipt of bank loan from bank 3,000,000

Payment to settlement agent for title search, stamp duties and settlement fees 48,000

Payment of delinquent property taxes assumed by ABC Company 50,000

Payment for land 3,000,000 Payment for the demolition of old building. 210,000

Proceeds from sale of materials from building. 78,000 Payment to architect. 750,000

Payment to City Hall for approval of building construction 50,000

Payment of safety fence around the construction site. 56,000

Payment to construction contractor for factory building. 5,000,000

Payment for external driveways, parking bays and safety lighting. 730,000

Payment of interest on construction loan 400,000

Payment for safety inspection on the building 30,000

Payment of equipment 570,000

Payment of freight and insurance cost on delivery of equipment. 48,000

Payment of installation cost on equipment 60,000

Payment of safety equipment surrounding equipment 140,000

Payment of removal of safety fence 20,000

Payment of new fence surrounding the factory. 150,000

Payment of advertisement in the newspaper about the forthcoming factory and its benefits to the community. 10,000

Payment for opening ceremony 70,000

Payment to adjust equipment to more efficient operating levels subsequent to initial operation 95,000

Questions:

1. The amount to be reported as expenses (excluding depreciation) on ABCs income statement is:

2. What is the cost of the equipment?

3. What is the cost of the land improvements?

4. What is the cost of the building?

5. What is the cost of the land?