Exercise 1 - Land and Building Cost Paesh Company was organized in June 2020. The following transactions pertain to land and building: Jun. 1 Organization fees paid to the state P 150,000 30 Land and old building with fair value P1,000,000 3,000,000 30 Corporate organization costs 300,000 July. 1 Title clearance fees 50,000 Aug. 31 Cost of razing old building to make room for new building 100,000 Sept. 1 Executive salaries with no participation in construction 600,000 Dec. 31 Land real state tax for 6-months ended December 31, 2020 90,000 31 Cost of new building completed and occupied on this date 8,000,000 Required: 1. What is the cost of the land? 2. What is the cost of the new building? Exercise 2 - Land and Building Cost The following expenditures were incurred by Lyon Enterprises Co. in 2019: Purchase of land P 3,900,000 Land Survey 52,000 Fees for search of title for land 6,000 Building permit 35,000 Temporary quarters for construction crews 107,500 Payment to tenants of old building for vacating the premises 46,000 Razing old building 470,000 Excavating basement 100,000 Special assessment tax for street project 20,000 Dividends 50,000 Damages awarded for injuries sustained in construction 84,000 Cost of construction 29,000,000 Cost of paving parking lot adjoining building 400,000 Cost of shrubs, trees, and other Landscaping 330,000 Required: 1. Among the expenditures mentioned, determine the cost of land. 2. Among the expenditures mentioned, determine the cost of the building.Exercise 3 - Machinery Joestar Company purchase a new machine for an invoice price of P3,360,000 inclusive of vat of P360,000. The purchase also had a purchase discount of P200,000 that Joestar was not able to avail due to financing difficulties. Other expenditures related to the machine were as follows: Shipping cost 170,000 Fees of experts for installation. 225,000 Refurbishing cost during installation 90.000 Trial run costs and testing cost before commencement of use. 85,000 Consultation fees before purchase 50,000 Safety rails and platform surrounding the machine 25,000 Cooling device installed, necessary to keep the machine running 445,000 Refurbishing costs after installation 115,000 Required: Compute the total cost of the new machine. Exercise 4 - Borrowing Cost Double Deutch Company constructed a building in 2020. Commencement of construction was on January 1 and was completed on December 31. Double Deutch loaned from the bank specifically to finance the said construction. The bank loan bears 12% interest per annum. The following pertains to the construction: Notes payable, 12%, specifically borrowed for building construction P5,000,000 Interest income from temporary investment 70,000 Loan amount spent on construction. 4,700,000 Required: How much should Monte Company capitalize as borrowing cost? Exercise 5 - Borrowing Cost High Standard Company erected a building during the year 2020. All funds used in construction were loaned for a generic purpose. The construction started on January 1 and was completed on December 31. The following pertains to the construction: General purpose loan, 10% P3,000,000 General purpose loan, 12% 2,000,000 Average expenditures 3,125,000 Required: Compute the borrowing cost capitalized. Round off all computed % to nearest one percentExercise 9 - Derecognition On March 31, 2020, Sterne Corp. retired a machine used in manufacturing designer parts. The machine was acquired May 1, 2017. Straight-line depreciation method was used computed up to the last month before retirement. The asset had an estimated residual value of P20,000 and a five- year life. On December 31, 2019, the balance in the accumulated depreciation is P320,000. The machine was scrapped and the company did not receive a single consideration. Required: 1. The loss on retirement is: (round off to the nearest peso, if needed) 2. Prepare the journal entry to record the retirement. Exercise 10 - Derecognition Helena acquire an asset that had a cost of P130,000. The asset is being depreciated over a 5-year period using the sum-of-the-years' digit method. It has a salvage value estimated at P10,000. Required: The loss/gain if the asset is sold for P38,000 at the end of the third year is