2. Mr. De Guzman bought a 2,000 square meter land at a cost of P500,000. Heleased the land to Mr. Dela Cruz at an annual rental of P40,000. The term of thecontract of lease is 15 years. The contract of lease provides that Mr. Dela Cruz willconstruct a building on the land and the building will belong to the lessor at the endof the term of the lease or at the termination of the lease. The building wasconstructed at a total cost of P400,000 and has an estimated useful life of 20 yearswhich is the basis of a straight line method of depreciation.REQUIREMENT – Compute for the below:a. Assuming that Mr. De Guzman will spread his income over the term ofthe contract of lease, compute for the annual income of Mr. DeGuzman.b. Assuming the contract of lease was terminated after the 10th year orat the beginning of the 11th year due to the fault of the lessee, computefor the income of Mr. De Guzman in the 11th year.

CALCULATION FOR THE ANNUAL INCOME: particular amount amount…

Answered: leased the land to Mr. Dela

Business

Accounting

leased the land to Mr. Dela

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1.
Dorothy and John Hufffschneider listed their house and lot for sale with C. B. Property. The asking price was $165,000, and the owners told C. B. that the size of the property was 6.8 acres. Dean Olson, a salesman for C. B., advertised the property in local newspapers as consisting of six acres. James and Jean Holcomb signed a contract to purchase the property through Olson after first inspecting the property with Olson and being assured by Olson that the property was at least 6.6 acres. The Holcombs never asked for or received a copy of the survey. In actuality, the lot was only 4.6 acres. The Holcombs now seek to rescind the contract. Decision?
You received an acre of land as a gift. At the time of the gift, the land had an FMV of $10,000. The donor’s adjusted basis was $15,000. After you received the land, no events occurred to increase or decrease your basis. If you sell the land for $20,000, you will have a
Which of the following is LEAST likely to be an object of valuation?a. A piece of land owned by the governmentb. A handwritten letter by an old family friend in a small communityc. A statue of a hero being decommissioned and to be sold in an auctiond. A publicly listed corporation
oshua owns undeveloped land that has an adjusted basis of $45,000. He exchanges it for other undeveloped land with an FMV of $70,000. Required: What are his realized and recognized gain or loss on the exchange? Note: If no gain or loss is recognized, select "No gain or loss". What is his basis in the acquired land?
Voytek transfers land worth $200,000 with an adjusted basis of $17,000 to his wife Gosha for her birthday. The land was purchased 3 years ago. Assume no gift tax was paid on the transfer. a) Does Gosha have gross income as a result of the gift? Yes or No. No? b If the answer is no, Explain why. c)What is Gosha basis in the land? d)What is Gosha holding period in the land?