On January 1, 2021, AVILA Builders purchased land and building for a lump-sum price of P18, 000,
Question:
On January 1, 2021, AVILA Builders purchased land and building for a lump-sum price of P18, 000, 000. The existing building will be demolished, and a new building will be constructed. Additional costs incurred: P 30,000 9,000 Title guarantee Option paid for the land and old building acquired Demolition costs Payments to tenants to vacate premises Proceeds from the sale of salvaged materials. The fair value of materials salvaged from the old building and used in the new building Construction of costs of new building 90,000 18,000 22, 500 45,000 12,750,000
Required: Compute for the correct amount of Land and Building assuming;
a. The land and building have fair values of P5, 000, 000 and P10, 000, 000, respectively.
b. The old building is unusable and has an insignificant fair value.
Expert Answer:
