Reference no: EM132744062

Question - Nicko Company purchased a tract of land as a factory site. An old building was demolished and construction began on the new building.

Purchase price of land and an old building - P 4,500,000

Fair value of old building - P 250,000

Cost of demolishing old building - P 300,000

Title insurance and legal fees to purchase land- P 200,000

Architect fee - P 950,000

New building construction - P 8,000,000

Survey before construction cost - P 100,000

Building permit or payment to city hall for approval of building construction - P150,000

Excavation before new construction - P 200,000

Liability insurance during construction - P 100,000

New fence surrounding the new building - P 100,000

Cost of lighting and signage - P 100,000

Driveway, parking bay and safety lighting - P 550,000

Cost of trees, shrubs and other landscaping - 300,000

Please classify them.

Required -

1. What is the cost of the land?

a. 4,550,000

b. 4,800,000

c. 4,850,000

d. 4,450,000

2. What is the cost of the new building?

a. 9,700,000

b. 9,750,000

c. 9,800,000

d. 9,950,000

3. What is the cost of land improvements?

a. 950,000

b. 650,000

c. 850,000

d. 400,000