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The following costs were incurred by ABCDEFGH, Inc.. during 2020:
July 1 Organization fees P120,000
July 2 Land site and old building 1,890,000
July 3 Option payments 250,000
July 20 Broker’s fees on property acquired 110,400
July 30Cost of remodeling the building 60,000
August 30 Salaries of executives 360,000
December 21 Real property taxes 240,000
Additional information:
- The building acquired had a fair value of P450,000 while the land was currently appraised at P1,800,000
- P50,000 of the option money paid were for properties not acquired.
- The executives had no participation on the remodeling of the building
- The property taxes were for the 2020 calendar year.
How much is the cost of land?
a. 1,856,320
b. 2,288,000
c. 1,992,320
d. 1,512,000
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