On January 1, 2018, the Danelle Company leased a portion of the commercial building owned by Joseph Commercial Company. The lease expires on December 31, 2025. Extensive work was done on the leased property for the construction of a restaurant considered as covid-19 safe. The improvements, costing P1,344,000, were completed on March 31, 2018. The estimated useful life of the improvement was 10 years. During 2021, because of favorable business operations in the area, Danelle negotiated for the extension of the lease term by an additional 3 years, ending on December 31, 2028. Danelle Company provides full year depreciation during the year of acquisition and no depreciation in the year of disposal. How much is the depreciation expense on the leasehold improvements for the year ended December 31, 2021?
On January 1, 2018, the Danelle Company leased a portion of the commercial building owned by Joseph Commercial Company. The lease expires on December 31, 2025. Extensive work was done on the leased property for the construction of a restaurant considered as covid-19 safe. The improvements, costing P1,344,000, were completed on March 31, 2018. The estimated useful life of the improvement was 10 years. During 2021, because of favorable business operations in the area, Danelle negotiated for the extension of the lease term by an additional 3 years, ending on December 31, 2028. Danelle Company provides full year depreciation during the year of acquisition and no depreciation in the year of disposal. How much is the depreciation expense on the leasehold improvements for the year ended December 31, 2021?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 11P
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23.On January 1, 2018, the Danelle Company leased a portion of the commercial building owned by Joseph Commercial Company. The lease expires on December 31, 2025. Extensive work was done on the leased property for the construction of a restaurant considered as covid-19 safe. The improvements, costing P1,344,000, were completed on March 31, 2018. The estimated useful life of the improvement was 10 years.
During 2021, because of favorable business operations in the area, Danelle negotiated for the extension of the lease term by an additional 3 years, ending on December 31, 2028.
Danelle Company provides full yeardepreciation during the year of acquisition and no depreciation in the year of disposal.
How much is the depreciation expense on the leasehold improvements for the year ended December 31, 2021?
During 2021, because of favorable business operations in the area, Danelle negotiated for the extension of the lease term by an additional 3 years, ending on December 31, 2028.
Danelle Company provides full year
How much is the depreciation expense on the leasehold improvements for the year ended December 31, 2021?
a. 120,000
b. 105,000
c. 168,000
d. 186,000
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