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Problem 4-33 Rental Income On March 1, 200A, Claudette leases a portion of its commercial building to Mark with the following terms: Advanced deposit Monthly rental Annual insurance premium to be paid by the lessee Portion (10 mos.) of real estate tax to be paid by lessee P 40,000 20,000 6,000 3,000/yr The lease contract also stipulates that a 5% of Mark's net revenue will be credited to Claudette as commission. Mark's net revenue during the year is P2,000,000.

Problem 4-33 Rental Income On March 1, 200A, Claudette leases a portion of its commercial building to Mark with the following terms: Advanced deposit Monthly rental Annual insurance premium to be paid by the lessee Portion (10 mos.) of real estate tax to be paid by lessee P 40,000 20,000 6,000 3,000/yr The lease contract also stipulates that a 5% of Mark's net revenue will be credited to Claudette as commission. Mark's net revenue during the year is P2,000,000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 4-33 Rental Income On March 1, 200A, Claudette leases a portion to Mark with the following terms: Advanced deposit Monthly rental Annual insurance premium to be paid by the lessee Portion (10 mos.) of real estate tax to be paid by lessee The lease contract also stipulates that a 5% of Mark's net revenue will be credited to Claudette as commission. Mark's net revenue during the year is P2,000,000. 1. Claudette's 200A rent income would be P 69,000. a. b. P240,000. 2. Assume that the advanced deposit is restricted, the Claudette's gross reportable taxable income would be Outright a. P240,500 b. P147,620 C. P239,940 d. P240,500 a. b. a. P347,500. b. P307,500. P308 Problem 4-34 Income from Leasehold Improvements The lease dated January 1, 200B provided for construction of improvements at the cost of the lessee, and the ownership will belong to the lessor at the end of 5-year lease contract. The construction of improvements which was completed at the end of the 3rd month of the contract amounted to P240,500. The improvement has an economic life of 8 years and estimated scrap value of P560. The rent income on improvements for year 1 under each method is C. d. C. d. Spread-Out P19,672 f its commercial building P 40,000 20,000 6,000 3,000/yr P22,143 P14,754 P15,479 Problem 4-35 Income from Leasehold Improvement The following information are available related to a 10-year lease contract which commenced on June 30, 200B: Cost of improvement put up by the lessee Estimated useful life of the improvement Date completed P180,000 P180,000 P180,000 P180,000 The reportable income from leasehold improvement for year 200B is Outright Method Spread-out Method P247,500. P347,500. C. P207,500. d. P169,000. P 1,974 P 3,750 P-0- P 3,947 P180,000 12 years December 31, 200B
Transcribed Image Text:Problem 4-33 Rental Income On March 1, 200A, Claudette leases a portion to Mark with the following terms: Advanced deposit Monthly rental Annual insurance premium to be paid by the lessee Portion (10 mos.) of real estate tax to be paid by lessee The lease contract also stipulates that a 5% of Mark's net revenue will be credited to Claudette as commission. Mark's net revenue during the year is P2,000,000. 1. Claudette's 200A rent income would be P 69,000. a. b. P240,000. 2. Assume that the advanced deposit is restricted, the Claudette's gross reportable taxable income would be Outright a. P240,500 b. P147,620 C. P239,940 d. P240,500 a. b. a. P347,500. b. P307,500. P308 Problem 4-34 Income from Leasehold Improvements The lease dated January 1, 200B provided for construction of improvements at the cost of the lessee, and the ownership will belong to the lessor at the end of 5-year lease contract. The construction of improvements which was completed at the end of the 3rd month of the contract amounted to P240,500. The improvement has an economic life of 8 years and estimated scrap value of P560. The rent income on improvements for year 1 under each method is C. d. C. d. Spread-Out P19,672 f its commercial building P 40,000 20,000 6,000 3,000/yr P22,143 P14,754 P15,479 Problem 4-35 Income from Leasehold Improvement The following information are available related to a 10-year lease contract which commenced on June 30, 200B: Cost of improvement put up by the lessee Estimated useful life of the improvement Date completed P180,000 P180,000 P180,000 P180,000 The reportable income from leasehold improvement for year 200B is Outright Method Spread-out Method P247,500. P347,500. C. P207,500. d. P169,000. P 1,974 P 3,750 P-0- P 3,947 P180,000 12 years December 31, 200B
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