Math Company was organized in early July of 2020. In your audit of the company's books, you find

the following land, building and equipment account:

Account title: Land, building and equipment

July 1 Organization fees P120,000

1 Land site and old building (note a) 1,950,000

3 Option payments (note b) 250,000

20 Broker's fees on property acquired 110,000

July 30 Cost of remodeling the building 60,00

Quiz4: INVESTING CYCLE - AUDIT OF PPE, INTANGIBLES AND OTHER ASSETS

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Aug. 29 Salaries of Executives (note c) 360,000

Sept. 1 Stock bonus to corporate promoters

12,000 shares, P25 market value per share 300,000

Dec. 15 Real property taxes (note d) 240,000

Audit notes:

a. The building acquired on July 1, 2020, had a fair value of P500,000 while the land was

currently appraised at P1,500,000.

b. P50,000 of the option money paid were for properties not acquired.

c. The executives had no participation on the remodeling of the building.

d. The property taxes were for the years 2019 and 2020.

Requirements:

5. How much is the correct cost of the Land?

6. How much is the correct cost of the Building?