Question
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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