Problem 5. Operating Lease- Lessor On January 1, 20x1, Lessor entered into an operating lease. Information follows: Annual Rent payable at the end of each year P100,000 Lease bonus paid by lessee to lessor Security deposit paid by the lessee to the lessor 15,000 Lease term 20,000 5 years. Additional Information: Annual rent payment includes P5,000 to cover for costs of administrative tasks Additional rent of 10% is to be paid for any excess of sales of Lessee over P1,000,000. Lessee's sales for 20x1 are P1, 100, 000. The security deposit will be returned to Lessee at the end of lease term. The appropriate discount rate is 12% Annual depreciation on the leased asset is P70,000 Other costs related to the earning of lease income are P5,000 Requirements: Compute for the profit earned on the lease transaction in 20x1.
Problem 5. Operating Lease- Lessor On January 1, 20x1, Lessor entered into an operating lease. Information follows: Annual Rent payable at the end of each year P100,000 Lease bonus paid by lessee to lessor Security deposit paid by the lessee to the lessor 15,000 Lease term 20,000 5 years. Additional Information: Annual rent payment includes P5,000 to cover for costs of administrative tasks Additional rent of 10% is to be paid for any excess of sales of Lessee over P1,000,000. Lessee's sales for 20x1 are P1, 100, 000. The security deposit will be returned to Lessee at the end of lease term. The appropriate discount rate is 12% Annual depreciation on the leased asset is P70,000 Other costs related to the earning of lease income are P5,000 Requirements: Compute for the profit earned on the lease transaction in 20x1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Problem 5. Operating Lease- Lessor
On
January
1,
20x1,
Lessor
entered
into
operating
lease.
an
Information followS:
Annual Rent payable at the end of each year
P100,000
Lease bonus paid by lessee to lessor
20,000
Security deposit paid by the lessee to the lessor
15,000
Lease term
5 years
Additional Information:
Annual
rent
payment
includes
P5,000
to
Cover
for
Costs
of
administrative tasks
Additional rent of 10%
is to be paid for any excess of sales of
Lessee over P1,000,000. Lessee's sales for 20x1 are P1, 100,000.
The security deposit will be returned to Lessee at
the end of
lease term. The appropriate discount rate is 12%
Annual depreciation on the leased asset is P70,000
Other costs related to the earning of lease income are P5,000
Requirements: Compute for the profit earned on the lease transaction
in 20x1.
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