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 Option fee for land not acquired 10, 000 10, 000 Taxes in arrears on building on land Payment for land Demotion of old building on land, net of salvage of P10, 000 50, 000 1, 000, 000 100, 000 Architect fee 230, 000 Payment to city hall for approval of building construction Contract price for factory building 120, 000 5, 000, 000 Safety fence around construction site 35, 000 Safety inspection on building Removal of safety fence after completion of factory building New fence surrounding the factory 30, 000 20, 000 80, 000 Driveways, parking bays and safety lighting a. How much is the cost of Land?_ 550, 000 b. How much is the cost of factory building?_
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 Option fee for land not acquired 10, 000 10, 000 Taxes in arrears on building on land Payment for land Demotion of old building on land, net of salvage of P10, 000 50, 000 1, 000, 000 100, 000 Architect fee 230, 000 Payment to city hall for approval of building construction Contract price for factory building 120, 000 5, 000, 000 Safety fence around construction site 35, 000 Safety inspection on building Removal of safety fence after completion of factory building New fence surrounding the factory 30, 000 20, 000 80, 000 Driveways, parking bays and safety lighting a. How much is the cost of Land?_ 550, 000 b. How much is the cost of factory building?_
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 41P
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Transcribed Image Text: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
Option fee for land not acquired
Taxes in arrears on building on land
Payment for land
Demotion of old building on land, net of salvage of P10, 000
10, 000
10, 000
50, 000
1, 000, 000
100, 000
Architect fee
230, 000
Payment to city hall for approval of building construction
Contract price for factory building
Safety fence around construction site
Safety inspection on building
Removal of safety fence after completion of factory building
New fence surrounding the factory
120, 000
5, 000, 000
35, 000
30, 000
20, 000
80, 000
Driveways, parking bays and safety lighting
a. How much is the cost of Land?
b. How much is the cost of factory building?
550, 000
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