LAND, BUILDING, LAND IMPROVEMENTS

Question 1

Payments to Tenants

Answer 1

Building

Question 2

Survey before construction

Answer 2

Land

Question 3

Fee for title search

Answer 3

Land

Question 4

Excavation before construction

Answer 4

Building

Question 5

Cost of grading, leveling, etc.

Answer 5

Land

Question 6

Driveways and walks - part of building

Answer 6

Building

Question 7

Delinquent Property Taxes

Answer 7

Allocated between Land and Building

Question 8

Interest cost on specific borrowing during construction

Answer 8

P/L

Interest Charges are always based on P/L.

Question 9

Cost of site preparation:
P/L or Equipment?

Answer 9

Equipment

Question 10

Consultant fees used for advice on the acquisition of equipment

Answer 10

Equipment

Question 11

Interest charges paid to supplier for deferred credit

Answer 11

P/L

Question 12

Estimated dismantling cost to be incurred

P/L or Equipment?

Answer 12

Equipment

Question 13

Cost of remodelling old building

Answer 13

Old Building

Question 14

PROBLEM:

Purchased a plot of land for P7,500,000 and there is an old building appraised at P2,500,000

Answer 14

To find purchase price of land, deduct the fair value of old building

Question 15

Supervision by management cost

Answer 15

Building (new)

Question 16

Cost of remodelling old building

Answer 16

Old Building

Question 17

Property Taxes prior to acquisition

Answer 17

Both land and building allocated

Question 18

Supervision Cost

Answer 18

New Building