Continuation of the problem...

At December 31, 20X2, certain accounts included in the property, plant, and equipment section of the Tatty Company's statement of financial position had the following balances: Land P100,000 Buildings Leasehold improvements P500,000 800,000 Machinery and equipment 700,000 During 20X 1 the following transactions occurred: 1. Land site number 621 was acquired for P1,000,000. Additionally, to acquire the land Tatty paid a P60,000 commission to a real estate agent. Costs of P15,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000. 2. A second tract of land (site number 622) with a building was acquired for P300,000. The closing statement indicated that the land was P200,000 and the building value was P100,000. Shortly after acquisition, the building was demolished at a cost of P30,000. A new building was constructed for P150,000 plus the following costs: Excavation fees P11,000 Architectural design fees 8,000 Building permit fee 1,000 The building was completed and occupied on September 29, 20X2. 3. A third tract of land (site number 623) was acquired for P600,000 and was put on the market for resale. 4. Extensive work was done to a building occupied by Tatty under a lease agreement that expires on December 31, 20X6. The total cost of the work was P125,000, which consisted of the following: Painting of the ceilings P. 10,000 (estimated useful life is one year) Electrical work 35,000 (estimated useful life is ten years) Construction of extension to current working area 80,000 (estimated useful life is thirty years) P125.000