On January 1, 2014. Versatile Company acquired a building for P10,450,000

including P500,000 nonrefundable purchase taxes. The purchase agreement

provided for payment to be made in full on December 31, 2014. Legal fees of

P220,000 were incurred in acquiring the building and paid on January 1, 2014. The

building is held to earn lease rentals and for capital appreciation. An appropriate

discount rate is 10%.

What is the initial cost of the investment property?

A. 9,500,000

C. 9,720,000

B. 9,700,000

D. 10,170,000