Maris Co. purchased a machine on January 1, 2018, for P2,500,000 for the express purpose of leasing it. The machine is expected to have a five-year life, no salvage value, and be depreciated on a straight-line monthly basis. On April 1, 2018, under a cancellable lease, Maris leased the machine to Dunbar Company for P750,000 a year for a four-year period ending March 31, 2022. Maris incurred total maintenance and other related costs under the provisions of the lease of P25,000 relating to the year ended December 31, 2018. Harley paid P750,000 to Maris on April 1, 2018. Assuming an operating lease, what should be the income before income taxes derived by Maris Co. from this lease for the year ended December 31, 2018?
Maris Co. purchased a machine on January 1, 2018, for P2,500,000 for the express purpose of leasing it. The machine is expected to have a five-year life, no salvage value, and be
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