Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental of P 12,000. Observing the provisions of the contract, Jose constructed a building which shall become the property of Bryant at the expiration of the lease. The construction was completed on January 1, 2015 a cost of P 1,000,000 with an estimated useful life of 20 years. It is also stipulated in the contract that the lessee will pay to the government the P 1,500 annual real property tax on the land starting in 2012. Assuming that on January 1, 2012, Jose paid P 24,000 to Bryant covering the lease contract for two years, how much income is to be reported by Bryant in 2012? P 12,000 P 13,500 P 24,000 P 25,500 How much income is to be reported by Bryant in 2015 under the outright method? P 13,500 P 1,500 P 1,013,500 P 1,000,00 How much income is to be reported by Bryant in 2015 under the spread-out method? P 13,500 P 1,500 P 1,013,500 P 88,500 How much is the deductible expense of the lessee in 2015? P 138,500 P 63,500 P 125,000 P 13,500 Assuming that due to the fault of the lessee, the lease contract was terminated on January 1, 2017, how much income is to be reported by the lessor in 2017? P 763,500 P 750,000 P 88,500 P 1,013,500

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

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10P: Petes Petroleum, Inc., an SEC registrant with a calendar year-end, is in the business of...

See similar textbooks

Related questions

Question

Bryant leased a land to Jose for a period of 11 years starting January 1, 2012 at an annual rental of P 12,000. Observing the provisions of the contract, Jose constructed a building which shall become the property of Bryant at the expiration of the lease. The construction was completed on January 1, 2015 a cost of P 1,000,000 with an estimated useful life of 20 years.

It is also stipulated in the contract that the lessee will pay to the government the P 1,500 annual real property tax on the land starting in 2012.

Assuming that on January 1, 2012, Jose paid P 24,000 to Bryant covering the lease contract for two years, how much income is to be reported by Bryant in 2012?

P 12,000
P 13,500
P 24,000
P 25,500

How much income is to be reported by Bryant in 2015 under the outright method?
P 13,500
P 1,500
P 1,013,500
P 1,000,00

How much income is to be reported by Bryant in 2015 under the spread-out method?

P 13,500
P 1,500
P 1,013,500
P 88,500

How much is the deductible expense of the lessee in 2015?
1. P 138,500
2. P 63,500
3. P 125,000
4. P 13,500

Assuming that due to the fault of the lessee, the lease contract was terminated on January 1, 2017, how much income is to be reported by the lessor in 2017?
P 763,500
P 750,000
P 88,500
P 1,013,500

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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