On January 1, 2021, BEE Corporation signed a 3-year operating lease for various office furniture and equipment at ₱300,000 per year. The lease included a provision for additional rent of 5% of annual company sales in excess of ₱2,000,000. BEE’s sales for the year ended Dec. 31, 2021 were ₱2,500,000. Upon execution of the lease, BEE Corporation paid ₱100,000 as a bonus for the lease What is BEE’s rent expense for the year ended December 31, 2021 if the lease is considered a “Low value lease”?
On January 1, 2021, BEE Corporation signed a 3-year operating lease for various office furniture and equipment at ₱300,000 per year. The lease included a provision for additional rent of 5% of annual company sales in excess of ₱2,000,000. BEE’s sales for the year ended Dec. 31, 2021 were ₱2,500,000. Upon execution of the lease, BEE Corporation paid ₱100,000 as a bonus for the lease What is BEE’s rent expense for the year ended December 31, 2021 if the lease is considered a “Low value lease”?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, BEE Corporation signed a 3-year operating lease for various office furniture and
equipment at ₱300,000 per year. The lease included a provision for additional rent of 5% of annual company sales
in excess of ₱2,000,000. BEE’s sales for the year ended Dec. 31, 2021 were ₱2,500,000. Upon execution of the
lease, BEE Corporation paid ₱100,000 as a bonus for the lease
What is BEE’s rent expense for the year ended December 31, 2021 if the lease is considered a “Low value lease”?
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