Reference no: EM133121148

Question - Until We Me Again Corp. commenced operations early in 2019. During the first nine months, Until We Me Again acquired real estate for the acquisition of a building and other facilities. Operating equipment was purchased and installed, and the company began operating activities on April 2019. The company's accountant, who was not sure how to record some of the transactions, opened a Property, Plant and Equipment (PPE) ledger account and recorded debits and (credits) to this account as follows:

Cost of real estate purchased as building site - P 1,700,000

Paid architect's fee for design of new building - 230,000

Paid for demolition of old building on the building site purchased - 280,000

Paid property tax on the real estate purchased as the building site. - 17,000

Paid excavation costs for the new building - 150,000

Made the first payment to the contractor - 2,500,000

Paid for equipment to be installed in the new building - 1,480,000

Received from sale of salvaged materials from demolishing the old building - (68,000)

Made final payment to the building contractor - 3,500,000

Capitalizable interest on the construction fund - 220,000

Paid freight on equipment purchased - 19,000

Paid installation costs of equipment - 42,000

Paid for repair equipment damaged during installation - 27,000

PPE Ledger Balance = P10,097,000

Required -

1. How much is the correct cost of the land?

A. P1,717,000

B. P1,929,000

C. P2,149,000

D. P2,011,000

2. How much is the correct cost of the land improvement?

A. P150,000

B. P82,000

C. P68,000

D. P-0-

3. How much is the correct cost of the building?

A. P6,812,000

B. P6,592,000

C. P6,380,000

D. P6,000,000

4. How much is the correct cost of the operating equipment?

A. P1,480,000

B. P1,507,000

C. P1,541,000

D. P1,568,000