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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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.
Step by step
Solved in 2 steps with 1 images
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education