MAGANDANGEHEMPLO, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, to build a new building and will not use the old building prior to its demolition. The following information relates to the land and building: Purchase price of the land and building P3,500,000 Fair value: Land 3,000,000 Old building 2,000,000 Historical cost Land 2,000,000 Old building 6,000,000 Demolition costs 700,000 Construction cost of the new building 15,000,000 Which of the following statements are true? Group of answer choices The cost of the new building is P17,100,000 million. The Company will recognize P1,400,000 as part of its buildings, under property, plant and equipment, prior to demolition. The cost of land is deemed to be P2,800,000. The amount of expense to be recognized is P2,100,000. Which is the demolition costs and the carrying value of the old building.
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MAGANDANGEHEMPLO, Inc. obtained a land with an old building, that will be accounted for under property, plant and equipment. The Company intends to demolish the old building, to build a new building and will not use the old building prior to its demolition. The following information relates to the land and building:
Purchase price of the land and building P3,500,000
Fair value:
Land 3,000,000
Old building 2,000,000
Historical cost
Land 2,000,000
Old building 6,000,000
Demolition costs 700,000
Construction cost of the new building 15,000,000
Which of the following statements are true?
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