What is the carrying amount of the leasehold improvement

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Reference no: EM132703184

Problem 1: At the beginning of the current year, Starker Company acquired a 5-year lease on land and building from another entity at an annual rental of P4,800,000. On the same date, the entity paid P9,600,000 representing rental for the first year and an advance rental for one year which will be applied for the last year of the lease contract. Further, the company paid P8,000,000 upon signing of the contract to obtain right to the lease. Improvements and alterations were made on the building at a cost of P2,000,000. What is the carrying amount of the leasehold improvement at the end of the year?

Reference no: EM132703184

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