old room co purchased land and building for a lump sum price of 48000000 the existing building w

1. The lump-sum price of land and building is ₱48,000,000. We need to allocate this amount betwe

Question

Old Room Co. purchased land and a building for a lump-sum price of ₱48,000,000. The existing building will be demolished, and a new building will be constructed. Old Room incurred the following additional costs: Title guarantee: ₱80,000 Option paid for the land and old building acquired: ₱24,000 Payments to tenants to vacate premises: ₱48,000 Cost of razing the old building: ₱240,000 Construction cost of new building (completed): ₱34,000,000 The land and old building have fair values of ₱20,000,000 and ₱40,000,000, respectively. Some salvaged wood planks from the demolition were used as wall panels in the new building. Old Room estimates that the salvaged wood planks have a fair value of ₱120,000. The other salvaged materials were sold for ₱60,000. What amount of the costs above is charged as an expense? a. ₱48,000 b. ₱32,048,000 c. ₱32,000,000 d. ₱0

          Old Room Co. purchased land and a building for a lump-sum price of ₱48,000,000. The existing building will be demolished, and a new building will be constructed. Old Room incurred the following additional costs: 
Title guarantee: ₱80,000 
Option paid for the land and old building acquired: ₱24,000 
Payments to tenants to vacate premises: ₱48,000 
Cost of razing the old building: ₱240,000 
Construction cost of new building (completed): ₱34,000,000 
The land and old building have fair values of ₱20,000,000 and ₱40,000,000, respectively.  
Some salvaged wood planks from the demolition were used as wall panels in the new building. Old Room estimates that the salvaged wood planks have a fair value of ₱120,000. The other salvaged materials were sold for ₱60,000. 
What amount of the costs above is charged as an expense? 
a. ₱48,000 
b. ₱32,048,000 
c. ₱32,000,000 
d. ₱0

Added by Trinidad S.

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