Please answer all the following questions. Kindly show the complete solution. Thank you so much.
*Please refer to the picture below for the other information*
Q1. What is the correct cost of the land?
a. P231,500
b. P225,000
c. P227,000
d. P244,500
Q2. What is the correct cost of the new building?
a. P326,950
b. P316,500
c. P313,500
d. P304,500
Q3. What is the correct cost of the land improvements?
a. P24,000
b. P26,000
c. P23,200
d. P0
Q4. What is the correct net amount charged against income statement for 2016?
a. P115,861
b. P108,250
c. P33,250
d. P120,000
Extracted text: 1. Shield Co. was incorporated on 1/2/16 but was unable to begin manufacturing activities until 8/1/16 because new factory facilities were not completed until that date. The Land and Building accounts at 12/31/16 per book were as follows: Date Item Amount 1/31/16 2/28/16 4/1/16 5/1/16 5/1/16 5/1/16 5/15/16 Land and old building P300,000 Cost of removing building (demolition or razing cost) Legal fees Fire insurance premium payment Special tax assessment for streets Partial payment of new building construction Hospitalization of injured construction worker (not covered by insurance) Insurance premiums for accident insurance during 4,000 6,000 5,400 4,500 150,000 10,000 6/1/16 Construction 12,000 8/1/16 Final payment on building construction (The building is already completed; UL 20 years. No Salvage Value) General expenses 150,000 8/1/16 9/1/16 12/31/16 30,000 Construction of fences 24,000 Asset write-up 75,000 Additional information: 1) To acquire the land and building on 1/31/16, the company paid P300,000 cash. The market value of the land and building is P150,000and P50,000, respectively. 2) When the old building was removed, Shield paid Tagagiba Co. P4,000, but also received P1,000 from the sale of salvaged material (credited to other income). At that time, the old building is still usable. 3) Legal fees covered the following: Cost of organization Examination of title covering purchase of land Legal work in connection with the building construction P2,500 2,000 1,500 P6,000 4) The fire insurance premium covered premiums for a three-year term beginning May 1, 2016. 5) General expenses covered the following for the period 1/2/16 to 8/1/16. President's salary Cost of broken window destroyed by barbarians Plant superintendent covering supervision of new building P15,000 5,000 10,000 P30,000 6) The fences are not part of the original blue print of the building. The useful life is estimated to be 10 years. 7) Because of the rising land costs, the president was sure that the land was worth at least P75,000 more than what it cost the company.