How much should be shown in FIVE's 2021 income statement as gross rental income? * On December 31, 2021, FIVE Corporation signed an operating lease for a warehouse with Aye Company for ten years at P30,000 per year. Upon execution of the lease, Aye paid FIVE P60,000, covering rent for the first two years. FIVE closed its books on December 31 and correctly reported P60,000 as gross rental income in its 2021 income tax return.

How much should be shown in FIVE's 2021 income statement as gross rental income? * On December 31, 2021, FIVE Corporation signed an operating lease for a warehouse with Aye Company for ten years at P30,000 per year. Upon execution of the lease, Aye paid FIVE P60,000, covering rent for the first two years. FIVE closed its books on December 31 and correctly reported P60,000 as gross rental income in its 2021 income tax return.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

How much should be shown in
FIVE's 2021 income statement as gross
rental income? *
On December 31, 2021, FIVE Corporation signed an operating lease for a warehouse with Aye
Company for ten years at P30,000 per year. Upon execution of the lease, Aye paid FIVE P60,000,
covering rent for the first two years. FIVE closed its books on December 31 and correctly reported
P60,000 as gross rental income in its 2021 income tax return.

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