How much is current portion of the liability to be presented

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Question - On January 1, 2022, Bergify Corp. signed a five-year non-cancelable lease for machine with BTS Company. The terms of the lease called for Bergify to make annual payments of P86,680 at the beginning of each year starting January 1, 2022. The machine has an estimated useful life of six years and a P50,000 unguaranteed residual value at the end of the five-year lease term. The machine reverts to the lessor at the end of five-year lease term. Bergify uses straight-line method of depreciation for all of its fixed assets. The implicit rate of the contract which is known by Bergify is 10%. The fair value of the machine on January 1, 2022 is P392,490. Bergify incurred P10,000 to install the machine. Bergify has an obligation to restore the machine to a condition suitable for use at the end of the lease term. Estimated cost of restoration is P20,000. (Round off the PV factor to four decimal places, then do not round off during the computation) How much is the current portion of the liability to be presented on December 31, 2022?

Reference no: EM133188158

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