B alvaro company sells magazines by subscription for ₱15 per copy. Duringthe year 47,200 two year subscriptipn were sold. As june 1 2001, tge unearned magazine revenues account had a balance of ₱315,000. At year-end, it is determined that tge liability to provide subscribers future magazines amounted to ₱613,000 Listed below is information pertaining to activities of the B. Alvaro Company that requireadjustments for the May 31, 2002 year-end financial statements:a. B. Alvaro Company entered into a lease agreement with Evangelista Corporation onNov. 1, 2001 for rental of office space for the next 24 months for P156,000. Asecond lease was signed on Feb. 1. 2002 for storage space for 6 months, withPS6,400 paid in advance.b. On June 1, 2001, the Office Supplies account had a debit balance of P42,600. OfficeSupplies in the amount of P165.200 were acquired during the year. A physical countof office supplies on May 31, 2002 totaled P31,700..c. B. Alvaro Company sells magazines by subscription for P15 per copy. During theyear, 47.200 two-year subscriptions were sold. As at June 1, 2001, the UnearnedAt year-end, it isMagazine Revenues account had a balance of P315,000.determined that the liability to provide subscribers' future magazines amounted toP613,000.d. On Dec. 1, 2001, B. Alvaro Company acquired a new computer for P131,400. It isanticipated that the computer will be used for 4 years with no salvage value..e.B. Alvaro Company pays its employees every 8th and 22h day of the month. Thereare five workdays within a workweek. The last payday was on May 22, 2002 (aWednesday). By month-end, there are already seven days of accrued salaries. Thepay scale at B. Alvaro is as follows:Employee CategoryNumber in Category3636ExecutivesManagersStaffDaily Rate per Employee600340240f. B. Alvaro Company borrowed P1,000,000 from the Dayrit Development Bank onMar. 1, 2002 and issued a 24% one-year note payable.

Name: B alvaro company sells magazines by subscription for ₱15 per copy. Dur
Uploaded: 2024-03-05T11:47:04.000Z
Channel: Bartleby
Description: B alvaro company sells magazines by subscription for ₱15 per copy. Duringthe year 47,200 two year subscriptipn were sold. As june 1 2001, tge unearned magazine revenues account had a balance of ₱315,000. At year-end, it is determined that tge liabili

Business

Accounting

B alvaro company sells magazines by subscription for ₱15 per copy. Duringthe year 47,200 two year subscriptipn were sold. As june 1 2001, tge unearned magazine revenues account had a balance of ₱315,000. At year-end, it is determined that tge liability to provide subscribers future magazines amounted to ₱613,000

B alvaro company sells magazines by subscription for ₱15 per copy. Duringthe year 47,200 two year subscriptipn were sold. As june 1 2001, tge unearned magazine revenues account had a balance of ₱315,000. At year-end, it is determined that tge liability to provide subscribers future magazines amounted to ₱613,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter20: Accounting For Leases

Section: Chapter Questions

Problem 2E: Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement...

See similar textbooks

Similar questions

Determining Type of Lease and Subsequent Accounting On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of 100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is 2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswells incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of 7,000 annually, related to taxes on the property, are paid by Caswell directly to the taxing authority on Dec. 31 of each year. Required: 1. Determine what type of lease this is for the lessee. 2. Prepare appropriate journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019 and 2020.
Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.
Lessee Accounting with Payments Made at Beginning of Year Adden Company signs a lease agreement dated January 1, 2019, that provides for it to lease non-specialized heavy equipment from Scott Rental Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: 1. The lease term is 4 years. The lease is noncancelable and requires annual rental payments of 20,000 to be paid in advance at the beginning of each year. 2. The cost, and also fair value, of the heavy equipment to Scott at the inception of the lease is 68,036.62. The equipment has an estimated life of 4 years and has a zero estimated residual value at the end of this time. 3. Adden agrees to pay all executory costs directly to a third party. 4. The lease contains no renewal or bargain purchase options. 5. Scotts interest rate implicit in the lease is 12%. Adden is aware of this rate, which is equal to its borrowing rate. 6. Adden uses the straight-line method to record depreciation on similar equipment. 7. Executory costs paid at the end of the year by Adden are: Required: 1. Next Level Determine what type of lease this is for Adden. 2. Prepare a table summarizing the lease payments and interest expense for Adden. 3. Prepare journal entries for Adden for the years 2019 and 2020.
On July 1, 2021, Walton Company leased office premises for a 3 year period at an annual rental of P360,000 payable on July 1 of each year. The first rent payment was made July 1, 2021. Additionally, on July 1, 2021, Walton Company paid P240,000 as a lease bonus to obtain a 3 year lease instead of the lessor’s usual term of 6 years. 1. In the December 31, 2021 statement of financial position, what should be reported as prepaid rent?
On January 1, 2006, Solitaire Company leased equipment for 7 years. The lease required an annual payment of $25,000 each for the first 4 years and an annual payment of $15,000 each for the remaining years. The lease agreement required Solitaire Company to pay $5,000 as annual insurance premium. On December 31, 2006, Solitaire Company paid $3,800 for repairs. Which of the following amounts was recorded as the rental revenue by the lessor at the end of Year 5? $25,000 $15,000 $20,000 $18,800
Please answer in good accounting form. Thanks! On January 1, 2020, EEE Corp. leased a warehouse for 5 years at an annual rental of ₱575,000 payable every December 31. The equipment had an estimated life of 8 years and shall revert back to the lessor at the expiration of the lease term. The lessee paid the lessor a lease bonus of ₱250,000 and was also responsible as per the lease agreement to pay the broker fees and commission amounting to ₱180,000. As an incentive however, the lessor shall reimburse EEE Corp. 75% of the said initial direct cost. The implicit lease rate known to both parties was at 12% while EEE Corporation’s incremental borrowing rate was at 10%.Requirements: (Use a PV FACTOR rounded off to 4 decimal places) 8. Depreciation expense on the Right of Use Asset in 2020 (under Straight Line Method)9. Carrying value of the Right of Use Asset as of December 31, 2021
On January 1, 2016, Winn Heat Transfer leased office space under a three-year operating lease agreement. The arrangement specified three annual rent payments of $80,000 each, beginning January 1, 2016, the inception of the lease, and at each January 1 through 2018. Winn also paid a $96,000 advance payment at the inception of the lease in addition to the first $80,000 rent payment. With permission of the owner, Winn made structural modifications to the building before occupying the space at a cost of $180,000. The useful life of the building and the structural modifications were estimated to be 30 years with no residual value. Required: Prepare the appropriate entries for Winn Heat Transfer from the inception of the lease through the end of 2016. Winn’s fiscal year is the calendar year. Winn uses straight-line depreciation.
Wall Company leased office premises to Fox Company for a 5 year term beginning January 1, 2021. Under the terms of the operating lease, rent for the first year is P800,000 and rent for years 2 through to 5 is P1,250,000 per annum. However, as an inducement to enter the lease, Wall Company granted Fox Company the first 3 months of the lease rent free. 1. In its December 31, 2021 income statement, what amount should Wall Company report as rental income? 2. In its December 31, 2021 statement of financial position, what amount should Wall Company report as rent receivable?
On 1 January 2012, an IFl entered into an ljarah Muntahia Bittamleek contract with a customer. The asset was purchased lease term, the asset shal be transferred as a gitt. The terms of the contract are Annual rentals $110,000 Term of lease= 4 years Residual value of asset at end= $3,000 Cost of the asset= $380,000 What shall be the accounting entries in the books of IF for the years 2012 to 2015?
Wall Co. leased office premises to Fox, Inc. for a five-year term beginning January 2, 20x9. Under the terms of the operating lease, rent for the first year is P8,000 and rent for years 2 through 5 is P12,500 per annum. However, as an inducement to enter the lease, Wall granted Fox the first six months of the lease rent-free. In its December 31, 20x9, income statement, what amount should Fox report as rent expense?
On January 1, 2018, ABC Company entered into a five-year nonrenewable operating lease, commencing on that date, for office space. The office space has a useful life of 50 years and the lease specifies a rent of P20,000 per month. The lessor paid an initial direct cost of P6,000 and incurred insurance and property tax expense in 2018 totaling P30,000. The depreciation of the office is P30,000. How much is the net income to be recognized by the lessor as a result of this lease in 2018?
On September 1, 2021, AYE Company entered into one-year nonrenewable lease, commencing on thatdate, 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 - ₱ 40,000The 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?