On 1st January, 2016, a building materials manufacturing company in Oman purchased a farm land from the outskirts of Al Dhakliyah region. The cost of the property was OMR 675,000 and the company has made the settlement in full. The property tax of OMR 36,000 was due from the previous owner of the farm was paid by the company. All the legal costs relating to the acquisition of land was OMR 5,400. The old building in the farm land was demolished at a cost of OMR 54,000 and certain materials from the old building were recovered by the demolishing persons. The total value of the salvaged materials from the demolished buildings was sold out and the value of such salvaged materials sold was OMR 9,000. The company is proposed to construct a new building which is going to be used exclusively for its business purpose. The city municipality has assessed for water connections, sewage and pavement of street and for this process the total cost was arrived at OMR 27,000.

a) Calculate the total cost of land to be recorded in the statement of financial position.

b) Usually, when a land is purchased much type of other related costs will be included with the purchase price of land. Mention the name of the costs which are included with the purchase price. Though it is a Land the life is an unlimited. Hence land is not considered for depreciation but land and building absolutely comes under depreciation. If you are agreeing with this statement, critically analyze with your explanation.