Reference no: EM132929357

Question - Carmela Company commenced operations at the beginning of the current year. The following costs are incurred by the entity:

Payment for land 1,000,000

Payment of property taxes in arrears 40,000

Title search and insurance 50,000

Option paid for an alternative land which was not acquired 30,000

Cost of relocating squatters 10,000

Special assessment for city improvements on water and sewer system 150,000

Demolition of old building on land, net of salvage of P 10,000 100,000

Survey before construction of new building 60,000

Contract price for factory building 5,000,000

Architect fee 230,000

Building permit or payment to city hall for approval of building construction 120,000

Excavation before new construction 110,000

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

Cost of trees, shrubs and other landscaping 250,000

Required - What amount should be reported respectively as initial measurement of the land and building?