PROBLEM 7 (Adapted)

Brave Company carried out a number of transactions involving the acquisition of several assets. All expenditures were recorded in the following single asset account, identified as Property and equipment:

Property and equipment

Acquisition price of land and building

960,000

Options taken out on several pieces of property

16,000

List price of machinery purchased

318,400

Freight on machinery purchased

5,000

Repair to machinery resulting from damage during shipment

1,480

Cost of removing old machinery

4,800

Driveways and sidewalks

102,000

Building remodeling

400,000

Utilities paid since acquisition of building

20,800

1,828,480

Based on property tax assessments, which are believed to fairly represent the relative values involved, the building is worth twice as much as the land. The machinery was subject to a 2% cash discount, which was taken and credited to Purchases Discounts. Of the two options, P 6,000 is related to the building and land purchased and P 10,000 related to those not purchased. The old machinery was sold at book value.

QUESTIONS:

Based on the above and the result of your audit, determine the adjusted balance of the following:

1. Land?

2. Building?

3. Machinery?