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Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental of P 12,000. Observing the provisions of the contract, Jose constructed a building which shall become the property of Bryant at the expiration of the lease. The construction was completed on January 1, 2015 a cost of P 1,000,000 with an estimated useful life of 20 years.   It is also stipulated in the contract that the lessee will pay to the government the P 1,500 annual real property tax on the land starting in 2012.   Assuming that on January 1, 2012, Jose paid P 24,000 to Bryant covering the lease contract for two years, how much income is to be reported by Bryant in 2012? P 12,000 P 13,500 P 24,000 P 25,500   How much income is to be reported by Bryant in 2015 under the outright method? P 13,500 P 1,500 P 1,013,500 P 1,000,00   How much income is to be reported by Bryant in 2015 under the spread-out method? P 13,500 P 1,500 P 1,013,500 P 88,500   How much is the deductible expense of the lessee in 2015? P 138,500 P 63,500 P 125,000 P 13,500   Assuming that due to the fault of the lessee, the lease contract was terminated on January 1, 2017, how much income is to be reported by the lessor in 2017? P 763,500 P 750,000 P 88,500 P 1,013,500

Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental of P 12,000. Observing the provisions of the contract, Jose constructed a building which shall become the property of Bryant at the expiration of the lease. The construction was completed on January 1, 2015 a cost of P 1,000,000 with an estimated useful life of 20 years.   It is also stipulated in the contract that the lessee will pay to the government the P 1,500 annual real property tax on the land starting in 2012.   Assuming that on January 1, 2012, Jose paid P 24,000 to Bryant covering the lease contract for two years, how much income is to be reported by Bryant in 2012? P 12,000 P 13,500 P 24,000 P 25,500   How much income is to be reported by Bryant in 2015 under the outright method? P 13,500 P 1,500 P 1,013,500 P 1,000,00   How much income is to be reported by Bryant in 2015 under the spread-out method? P 13,500 P 1,500 P 1,013,500 P 88,500   How much is the deductible expense of the lessee in 2015? P 138,500 P 63,500 P 125,000 P 13,500   Assuming that due to the fault of the lessee, the lease contract was terminated on January 1, 2017, how much income is to be reported by the lessor in 2017? P 763,500 P 750,000 P 88,500 P 1,013,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental of P 12,000. Observing the provisions of the contract, Jose constructed a building which shall become the property of Bryant at the expiration of the lease. The construction was completed on January 1, 2015 a cost of P 1,000,000 with an estimated useful life of 20 years.

 

It is also stipulated in the contract that the lessee will pay to the government the P 1,500 annual real property tax on the land starting in 2012.

 

  1. Assuming that on January 1, 2012, Jose paid P 24,000 to Bryant covering the lease contract for two years, how much income is to be reported by Bryant in 2012?
  • P 12,000
  • P 13,500
  • P 24,000
  • P 25,500

 

  1. How much income is to be reported by Bryant in 2015 under the outright method?
  2. P 13,500
  3. P 1,500
  4. P 1,013,500
  5. P 1,000,00

 

  1. How much income is to be reported by Bryant in 2015 under the spread-out method?
  • P 13,500
  • P 1,500
  • P 1,013,500
  • P 88,500

 

  1. How much is the deductible expense of the lessee in 2015?
    1. P 138,500
    2. P 63,500
    3. P 125,000
    4. P 13,500

 

  1. Assuming that due to the fault of the lessee, the lease contract was terminated on January 1, 2017, how much income is to be reported by the lessor in 2017?
  2. P 763,500
  3. P 750,000
  4. P 88,500
  5. P 1,013,500
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