Roxanne leased a facility from Samantha. Part of the lease agreement is for Roxanne to improve the facility. Details of the improvements were as follows: cost of the improvement- P 10M, Estimated useful life-20 years, remaining lease term-10 years. However at the beginning of the 6th year, both parties agreed to terminate the lease agreement. Consequently Samantha took possession of the improvements. The fair value of the improvements at the time was P3.5M. What amount should Samantha report income from improvement on the 6th year of the lease agreement.

Roxanne leased a facility from Samantha. Part of the lease agreement is for Roxanne to improve the facility. Details of the improvements were as follows: cost of the improvement- P 10M, Estimated useful life-20 years, remaining lease term-10 years. However at the beginning of the 6th year, both parties agreed to terminate the lease agreement. Consequently Samantha took possession of the improvements. The fair value of the improvements at the time was P3.5M. What amount should Samantha report income from improvement on the 6th year of the lease agreement.

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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