On January 1, 2015, MARS Inc. acquired a real property consisting of a land with a building for P10,000,000. As of this date, the fair value of the land is P16,000,000 and the fair value of the building is P4,000,000. MARS Inc. incurred P100,000 demolition cost on the old building. The salvage value from scrap materials from the old building is P20,000. __________a. Cost of Land if the demolished building is unusable __________b. Cost of Land if the demolished building is usable and the old building is demolished immediately to make room for construction of a new building __________c. Cost of new building if the demolished building is usable and the old building is demolished immediately to make room for construction of a new building classified as inventory
On January 1, 2015, MARS Inc. acquired a real property consisting of a land with a building for P10,000,000. As of this date, the fair value of the land is P16,000,000 and the fair value of the building is P4,000,000. MARS Inc. incurred P100,000 demolition cost on the old building. The salvage value from scrap materials from the old building is P20,000.
__________a. Cost of Land if the demolished building is unusable
__________b. Cost of Land if the demolished building is usable and the old building is demolished immediately to make room for
construction of a new building
__________c. Cost of new building if the demolished building is usable and the old building is demolished immediately to make room
for construction of a new building classified as inventory
__________d. Cost of new building if the demolished building is usable and the old building is demolished immediately to make room
for construction of a new building classified as PPE or Investment Property
__________e. Cost of Land if the demolished building is usable and the old building is demolished immediately to make the land
available/ready for use
__________f. Cost of new building if the demolished building is usable and the old building is demolished only on year 2016 to make
room for construction of a new building classified as inventory, PPE or Investment Property
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