On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows: Quarter ended Amount March 31 P3,200,000 June 30 3,000,000 What amount of rent income should be reflected in Lessor’s quarterly income statement for the three months ended June 30?
On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows: Quarter ended Amount March 31 P3,200,000 June 30 3,000,000 What amount of rent income should be reflected in Lessor’s quarterly income statement for the three months ended June 30?
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 61P
Related questions
Question
On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows:
Quarter ended |
Amount |
March 31 |
P3,200,000 |
June 30 |
3,000,000 |
What amount of rent income should be reflected in Lessor’s quarterly income statement for the three months ended June 30?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
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.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT