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? O The cost of land is deemed to be P2.800,000. O The Company will recognize P1,400.000 as part of its buildings, under property. plant and equipment, prior to demolition. O The amount of expense to be recognized is P2.100.000. Which is the demolition costs and the carrying value of the old building. O The cost of the new building is P17,100.000 million.
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? O The cost of land is deemed to be P2.800,000. O The Company will recognize P1,400.000 as part of its buildings, under property. plant and equipment, prior to demolition. O The amount of expense to be recognized is P2.100.000. Which is the demolition costs and the carrying value of the old building. O The cost of the new building is P17,100.000 million.
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 3PA: During the current year, Alanna Co. had the following transactions pertaining to its new office...
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Transcribed Image Text: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?
O The cost of land is deemed to be P2.800,000.
O The Company will recognize P1.400.000 as part of its buildings. under property. plant and equipment, prior to demolition.
O The amount of expense to be recognized is P2.100.000. Which is the demolition costs and the carrying value of the old building.
O The cost of the new building is P17,100.000 million.
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