Problem 01 During the current year. Burr Company had the following transactions pertaining to a new office building: Purchase price of land 600.000 Legal fees for contract to purchase land 20.000 Architect fee 80,000 Demolition of old building on site 50.000 Sale of scrap from old building 30.000 Construction cost of new building fully completed 3.500.000 What amount should be reported as cost of land and building at year-end? Problem 02 We Company installed a production assembly line to manufacture furniture. In the current year. the entity purchased a new machine and rearranged the assembly line to install this machine. The rearrangement did not increase the estimated useful life of the assembly line. but it did result in significantly more efficient production. The following expenditures were incurred in connection with this project: Machine 750.000 Labor to install machine 140.000 Parts added in rearranging the assembly line 400.000 Labor and overhead to rearrange the assembly line 180.000 What total amount of the expenditures should be capitalized? Problem 03 Bell Printing Company incurred the following costs: Purchase of collating and stapling attachment 840.000 Installation of attachment 360.000 Replacement parts for overhaul of press 260,000 Labor and overhead in connection with overhaul 140.000 The overhaul resulted in a significant increase in production. Neither the attachment nor the overhaul increased the estimated useful life of press. What total amount of the costs should be capitalized? Problem 4 Tanzania Company has decided to expand its operations and has purchased land in Smallville for construction ofa new manufacturing plant. The following cost were incurred in purchasing the property and constructing the building: Land purchase price 2,500,000 Payment of delinquent property taxes 100,000 Title search and insurance 50,000 Special assessment for city improvement on water and sewer 150.000 Building permit 30,000 Cost to destroy existing building on land (P10,000 worth of salvaged material used in new building] 60,000 Contract cost of new building 7,000,000 Architect fee 200,000 Sidewalk and parking lot 100,000 Fire insurance on building - 1 year. 40,000 What amount should be reported as the cost of the land and building, respectively