On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 dueat the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales inexcess of P10,000,000. The contingent rent is paid in one payment on December 31. The samelessee has used the building for the past 5 years, and in each of those years the lessee reachedthe contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first twoquarters are as follows:Quarter endedAmountMarch 31P3,200,000June 303,000,000What amount of rent income should be reflected in Lessor's quarterly income statement for thethree months ended June 30?

As far as concern with lessor we know the concept of conservatism or say prudence concept.…

Answered: In addition, the lessee must pay…

In addition, the lessee must pay contingent rer e contingent rent is paid in one payment on De for the past 5 years, and in each of those year

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Mr. Cruz agreed to settle a debt by making 12 quarterly payments of P 450 each. If he failed to make…

A: Quarterly payment (Q) = P 450 n = 12 payments r = 8% per annum = 2% per quarter Let X = Debt amount

Q: Higuel owes $650 in 3 years and $1500 in 8 years. However, Miguel is unable to meet his $650…

A: In case of simple interest, the interest amount is charged only on the principal amount. This is…

Q: Mr. Sabalbaro borrows P600, 000 at 12% compounded annually, agreeing to repay the loan in 15 equal…

A: Annuity: It is the payment plan where one can get a regular amount of money after making the lump…

Q: Mr. Abella owes Mr. Divinagracia the following obligations. (1) P100 due at the end of 10 years.(2)…

A: First obligation (X1) = P 100 in 10 years Second obligation (X2) = P 200 in 5 years + Interest at 5%…

Q: Jasmine deposited $900 at the end of every month into an RRSP for 7 years. The interest rate earned…

A: Monthly deposit: $900Number of years: 7Interest rate with semi-annual compounding for 5 years:…

Q: Dahyun contracted a 4-year lease of a machinery with Jackson Weng on January 1, 20x1. Rent in 20x1…

A: A lease is a financial arrangement between two parties, i.e., lessor and lessee. In this…

Q: On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract,…

Q: Z Corporation leased out its commercial space to C. Per agreement, C shall pay a monthly rental of…

A: Gross Income: The term "gross income" refers to the entire amount of money received by an individual…

Q: On January 1, 2020 an entity entered into a lease for commercial space with the following…

Q: How much is the rent receivable/ unearned rent as of December 31, 2021? show complete solution…

A: Rent Income Rental income for the year (30000 X 12) 3,60,000 Amortization of bonus…

Q: On Oct. 1, 2017, Diana company leased office space at a monthly rental of 400,000 for 10 years…

A: Total rent payable for the lease = monthly rent x no. of months = 400,000 x 117 months (From Jan 1,…

Q: The lessor and the lessee entered into a lease agreement on 1 January 2019. On that date, the lease…

A: Lease is an agreement between two parties in which one party provides its asset for use to other…

Q: Dr. Alice Foyle (lessee) has a non-cancelable, 20-year lease with Brownback Realty Inc. (lessor) for…

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: Lessee enters into a five-year lease of office space on January 1, and concludes that the agreement…

A: In the case of an operating lease, the lease rentals are expensed in the books. In case, where lease…

Q: A business has been involved in a lawsuit that they have lost in court. The judge has ordered money…

A: An annuity is a long-term commitment that an insurance provider issues and is intended to help…

Q: Stephen deposited $1,200 at the end of every month into an RRSP for 8 years. The interest rate…

A: Amount deposited at the end of every month is $1200 Time period is 8 years Interest rate for first…

Q: 10. Aleq borrows P9,500 and agrees to pay the compound amount after 5 years. If interest is at the…

A: The compound value of money can be depicted as the amount of interest generated on interest earned…

Q: Mr. Roxas pays monthly amortization of P54,100 for a parcel of land. The amortization factor for 5…

A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that…

Q: To discharge a debt, with the interest of 7% compounded monthly, Mark agrees to pay P500 at the…

A: Monthly payment = P500 Period = 6 Years Number of monthly payments = 6*12 = 72 Annual interest…

Q: Lauren deposited $1,200 at the end of every month into an RRSP for 7 years. The interest rate earned…

A: Deposit = 1200 per month END OF PERIOD DEPOSITS Time Period = 7 Years × 12 = 84 Months Semi…

Q: To discharge a debt, with the interest of 7% compounded monthly, Mark agrees to pay P500 at the…

A: The Present Value of Annuity Due is the present value of a series of cash payments that are expected…

Q: On January 1, 2019. Eric, the lessee, and Betty, the lessor, signed a noncancelable lease agreement…

A: Lease: It is an agreement wherein one party allows another to use the assets for the specified…

Q: Determine the following: 1. Total present amount of the obligations. 2. Total future amount of the…

A: Present value can be defined as the amount of money that have to be invested today to earn a…

Q: Mabuhay Company leased equipment on January 1, 2020. Annual rental to be paid at the end of each…

A: Lease Liability: The lease liability is computed as the present value of cash inflows discounted at…

Q: To discharge a debt, with the interest of 7% compounded monthly, Mark agrees to pay P500 at the…

A: Using Excel PV function

Q: On June 1, 2018 ABC Company entered into a 5-year nonrenewable lease, commencing on that date, for…

A: Definition: Revenues: Revenues are earnings from operations of a business. The operating activities…

Q: How much is the carrying amount of the lease liability as of yearend 2021? How much is the carrying…

A: Lease liability is the responsibility that a company undertakes upon entering into a lease agreement…

Q: Rigoberto invests $7,500, at 10% interest, compounded semiannually for 1 year. Use the compound…

A: An interest rate method in which current interest is computed by multiplying the interest rate by…

Q: On January 1, 2020 an entity entered into a lease for commercial space with the following…

A: Operating Lease is a type of lease in which asset is lent of in form of rent. Which means that…

Q: On January 2, 2019, Min leased an office space for an annual rental of P600,000 payable every…

A: A lease is an agreement whereby one party gives the other party the right to use real estate or land…

Q: Claude leased a facility from ML partnership in January 1, 2018. Terms of the lease were as follows:…

A: Partnership:The partnership refers to the arrangement when more than two individuals come together…

Q: A six-year operating lease requires annual rent payments of $15,000 for years 1, 2, and 3, and…

A: Lets understand the basics. As per IFRS 16 "Leases", when there is operating lease then lessor…

Q: Alexis deposited $1,000 at the end of every month into an RRSP for 7 years. The interest rate earned…

A: Future value of annuity (FVA) is a stream of recurring cashflow compounded at specified rate.…

Q: On June 1, 2018, ABC Company entered into a 5-year nonrenewable lease, commencing on that date, for…

A: Lease: It is an agreement between the two parties, in which the lessor leases the asset to the…

Q: On January 1, Year 1, Philip Holding invests $40,000 in an annuity to provide 8 equal semi-annual…

A: Annuity refers to the regular and systematic payment or withdrawal from the amount deposited in an…

Q: On 1st of January 2019, Sohar SAOG and Salalah SAOC entered into a lease agreement. In the contract,…

A: Answer is 'b'. OMR 1080 Fair market value of truck = OMR 25000 Less:- Annual lease payment =…

Q: On July 1, 2019, a taxpayer enters into a 36-month lease. The terms of the lease require the…

A: The deduction for the expenses incurred on assets would only be provided for the portion of usage…

Q: On January 1, 2020 Venti Company rented out an apartment to Barbatos Company for an operating lease…

A: Journal entry in the books of Barbatos(lessee) Date particulars Debit Credit Dec. 31, 2020…

Q: rek deposited $700 at the end of every month into an RRSP for 7 years. The interest rate earned was…

A: Compound interest is a financial concept in which the interest generated on an initial sum of money,…

Question

On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due
at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in
excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same
lessee has used the building for the past 5 years, and in each of those years the lessee reached
the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two
quarters are as follows:
Quarter ended
Amount
March 31
P3,200,000
June 30
3,000,000
What amount of rent income should be reflected in Lessor's quarterly income statement for the
three months ended June 30?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Luis deposited $900 at the end of every month into an RRSP for 9 years. The interest rate earned was 4.50% compounded semi-annually for the first 4 years and changed to 4.75% compounded monthly for the next 5 years. What was the accumulated value of the RRSP at the end of 9 years? Round to the nearest cent
On January 1, 2019, Ashly Farms leased a hay baler from Agrico Company. The lease requires Ashly to make $3,000 payments on January 1 of each year for 5 years beginning in 2019. The interest rate is 12%. Calculate the present value of Ashly's lease payments as of January 1, 2019.
Lessee enters into a three year lease of equipment and agrees to make the following annual payments at the end of each year 10,000 in year one, 12,000 in year two and 14,000 in year three. Discount rate is approx. 4, 235% and right of use asset is depreciated on a straight line basis over the lease term. What is the value of the lease liability at the end of years 2 & 3?
Mark has an amortization and he is required to do semi-annual payments for 15 years. If the present value is 10,000,000 pesos and the interest rate is 17% interest rate compounded semi-annually, how much is the outstanding balance after the 8th payment? 9,128,071.23 pesos remaining 7,878,981.87 pesos remaining 9,234,561.98 pesos remaining 7,453,441.05 pesos remaining
A lessee company signed a lease for equipment from a lessor on January 1, Year 1. The lease requires equal rental payments of $18,820 at the beginning of each year of the term. The PV of the lease payments is $108,950. The company pays all executory costs directly to third parties. The appropriate interest rate is 8.65%. Assume IFRS 16 applies. Both the lessor and lessee have December 31 year ends. How much wil be the balance of the Lease Liability in the lessee's books at the end of Year 1 after all adjusting entries assuming (1) the fair value of the equipment equals the PV of the lease payments and (2) any interest is accrued directly to the Lease Liability? 1. $88,134 2. $90,582 3. $93,030 4. $95,478 5. $97,926
Kate owes P120 000 due in 4 years plus the accumulated interest from today at 13% compounded quarterly. She agrees to pay it in installment: P30,000 after 2 years; P40,000 after 3 years the remaining balance at the end of 4 years If the obligation was to be settled by equal periodic payments with first payment due at the beginning of the 3rd quarter of the 2nd year. Find the amount of the equal payments.
Jackson, Inc., an engineering consulting firm, uses the cash method of accounting and is a calendar year taxpayer. Read the requirement. Compute the amount of Jackson's current year deductions for the following transactions: (Enter a "0" if no current year deduction is allowed.) a. On November 1 of the current year, it entered into a lease to rent some office space for five years. The lease agreement states that the lease payments are $14,400 per year, payable in advance each November 1 for the following 12-month period. Under the terms of the lease, Jackson is required to pay a $2,500 deposit, refundable upon the termination of the lease. The deduction amount for transaction a. is
Mr. Roxas pays monthly amortization of P54,100 for a parcel of land. The amortization factor for 5 years at 21% is 0.02705. If Mr. Roxas paid a down payment of 20% of the contract price, compute the principal obligation in which the monthly amortization is based?
Scupper Farms, the lessee, and Tyrrell Equipment, the lessor, sign a lease agreement on January 1, 2019, that provides for Scupper to lease a cultivator from Tyrrell. The lease terms, provisions, and other related events are as follows: The lease is noncancelable and has a term of 6 years. The annual rentals are $55,000 payable at the beginning of each year. Scupper agrees to pay all executory costs directly to a third party, which are expected to be $1,100 annually, including property taxes of $500, insurance of $350, and maintenance of $250. These costs are paid each year on November 1. The cultivator has an estimated economic life of 6 years. Scupper guarantees a residual value of $60,000 at the end of 6 years. Scupper believes it is probable that it will pay $15,000 cash as a result of this guarantee. The interest rate implicit in the lease is 14%, which is known by Scupper. Scupper’s incremental borrowing rate is 15%, and it uses the sum-of-the-years’-digits method to record…
Jonathan borrowed $10,000 at 6% annual compound interest. He agreed torepay the loan with five equal annual payments of $2,374 at end-of-years1–5. How much of the annual payment is interest, and how much principalis there in each annual payment?
Vanessa deposited $1,300 at the end of every month into an RRSP for 7 years. The interest rate earned was 4.50% compounded semi-annually for the first 3 years and changed to 4.75% compounded monthly for the next 4 years. What was the accumulated value of the RRSP at the end of 7 years?.