Reference no: EM132627902

UM Company had the following property acquisitions during the current year:

1. Acquired a tract of land with an existing building in exchange for 50,000 ordinary shares of P100 par value with a market price of P120 per share on the date of acquisition. The last property tax bill indicated assessed value of P2,800,000 for the land and P1,200,000 for the building. However, the land has a fair value of P5,500,000 and the building has no determinable fair value. Shortly after acquisition, the building was razed at a cost of P100,000 in anticipation of a new building construction.
2. Received land from a major shareholder as an inducement to locate a plant in the city. No payment was required but Jomalyn paid P50,000 for legal land transfer. The land is fairly valued at P2,000,000.

Question 1: What is the total increase in land as a result of the acquisition?