Victory Company signed a 6-year lease for a store space on January 1, 2017. The entity has an option to renew the lease for an additional 4-year period on or before January 1, 2020. During January 2019, the entity made substantial improvement to the store. The cost of the improvement was P1,080,000 with an estimated useful life of 10 years. On December 31, 2019, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2019. On December 31, 2019, what is the carrying amount of the leasehold improvement? *

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Victory Company signed a 6-year lease for a store space on January 1,
2017. The entity has an option to renew the lease for an additional 4-year
period on or before January 1, 2020. During January 2019, the entity made
substantial improvement to the store. The cost of the improvement was
P1,080,000 with an estimated useful life of 10 years. On December 31,
2019, the entity intended to exercise the renewal option. The entity has
taken a full year depreciation on this leasehold improvement for 2019. On
December 31, 2019, what is the carrying amount of the leasehold
improvement? *
Transcribed Image Text:Victory Company signed a 6-year lease for a store space on January 1, 2017. The entity has an option to renew the lease for an additional 4-year period on or before January 1, 2020. During January 2019, the entity made substantial improvement to the store. The cost of the improvement was P1,080,000 with an estimated useful life of 10 years. On December 31, 2019, the entity intended to exercise the renewal option. The entity has taken a full year depreciation on this leasehold improvement for 2019. On December 31, 2019, what is the carrying amount of the leasehold improvement? *
Expert Solution
steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Knowledge Booster
Lease accounting
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.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education