Reference no: EM133137931

Question - Isabela Company commercial operations at the beginning of the current year. The following costs are incurred by the entity during the current year:

Option fee for land acquired 10,000

Option fee for land not acquired 10,000

Taxes in arrears on building on land 50,000

Payment for land 1,000,000

Demotion of old building on land, net of salvage of P10,000 100,000

Architect fee 230,000

Payment to city hall for approval of building construction 120,000

Contract price for factory building 5,000,000

Safety fence around construction site 35,000

Safety inspection on building 30,000

Removal of safety fence after completion of factory building 20,000

New fence surrounding the factory 80,000

Driveways, parking bays and safety lighting 550,000

Required -

a. How much is the cost of Land?

b. How much is the cost of factory building?