cquire the land, Snow Company paid a P15,000 commission to a real estate agent. P25,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000 Land J was acquired on September 30, 2016 on which a new building will be immediately constructed. The cost related to the acquisition included the following: Cash payment P1,400,000 Broker’s fee 80,000 Option price paid for the land acquired 120,000 Option price for land that was not acquired 40,000 Delinquent property taxes for 2015 that was assumed and paid by Snow Company 120,000 Property taxes for 2016 to be paid on or before Dec. 31, 2016 160,000 Cost of relocating squatters 20,000 Received from the city government Land B as an inducement to locate a plant in the city. The f
cquire the land, Snow Company paid a P15,000 commission to a real estate agent. P25,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000 Land J was acquired on September 30, 2016 on which a new building will be immediately constructed. The cost related to the acquisition included the following: Cash payment P1,400,000 Broker’s fee 80,000 Option price paid for the land acquired 120,000 Option price for land that was not acquired 40,000 Delinquent property taxes for 2015 that was assumed and paid by Snow Company 120,000 Property taxes for 2016 to be paid on or before Dec. 31, 2016 160,000 Cost of relocating squatters 20,000 Received from the city government Land B as an inducement to locate a plant in the city. The f
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 76P
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During 2016, Snow Company acquired/received the following assets: Land D acquired for P220,000. In addition, to acquire the land, Snow Company paid a P15,000 commission to a real estate agent. P25,000 were incurred to clear the land. During the course of clearing the land, timber and gravel were recovered and sold for P5,000 Land J was acquired on September 30, 2016 on which a new building will be immediately constructed. The cost related to the acquisition included the following: Cash payment P1,400,000 Broker’s fee 80,000 Option price paid for the land acquired 120,000 Option price for land that was not acquired 40,000 Delinquent property taxes for 2015 that was assumed and paid by Snow Company 120,000 Property taxes for 2016 to be paid on or before Dec. 31, 2016 160,000 Cost of relocating squatters 20,000 Received from the city government Land B as an inducement to locate a plant in the city. The fair value of the land was P600,000. No payment was required by Snow Company paid P40,000 of legal costs for land transfer. Grading and leveling cost totaled P30,000. The amount initially capitalized under property, plant and equipment is
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