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On January 1, 2021 British Company leased a building to Brill under an operating lease for ten years at 600,000 per year, payable at the first day of each lease year.
British has paid an amount of 250,000 for a real estate broker as a finder's fee. The building is depreciated annually for 120,000 aside from this the company has also paid insurance and property tax expense of P90,000.
Problem 1: What should be the reported net income for 2021?
a. 365,000 b. 140,000 c. 600,000 d. 455,000
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