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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

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.

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