Please answer in good accounting form. Thank you! 1. On September 1, 2021, AYE Company entered into one-year nonrenewable lease, commencing on that date, for an office space and made the following payments to XYZ Properties: • Bonus to obtain lease - ₱ 120,000 • First month’s rent - ₱ 40,000 • Last month’s rent - ₱ 40,000 The lease is considered “Short-term lease” in its income statement for the year ended Dec. 31, 2021. What amount should AYE report as rent expense for the year ended, December 31, 2021? 2. 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”? 3. As an inducement to enter a lease, CEE Company, a lessor, grants ABC Management Corporation, a leaseholder, nine months of free rent under a two-year operating lease for its office furniture and equipment. The lease is effective on Feb. 1, 2021 and provides for monthly rental of ₱30,000 to begin November 1, 2021. If the lease is considered “Low value lease”, what amount of accrued rent should CEE Company report in its December 31, 2021 statement of financial position?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Please answer in good accounting form. Thank you!

1. On September 1, 2021, AYE Company entered into one-year nonrenewable lease, commencing on that date, for an office space and made the following payments to XYZ Properties:
• Bonus to obtain lease - ₱ 120,000
• First month’s rent - ₱ 40,000
• Last month’s rent - ₱ 40,000
The lease is considered “Short-term lease” in its income statement for the year ended Dec. 31, 2021.

What amount should AYE report as rent expense for the year ended, December 31, 2021?

2. 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”?

3. As an inducement to enter a lease, CEE Company, a lessor, grants ABC Management Corporation, a leaseholder, nine months of free rent under a two-year operating lease for its office furniture and equipment. The lease is effective on Feb. 1, 2021 and provides for monthly rental of ₱30,000 to begin November 1, 2021.

If the lease is considered “Low value lease”, what amount of accrued rent should CEE Company report in its December 31, 2021 statement of financial position?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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