An entity entered into a one-year tenancy contract from March 1, 2021, to February 28, 2022. The monthly rental was P90,000. For the year ended December 31, 2021, the entity paid P1,080,000 for the contract and recorded it as rental expenses. The profit for the year ended December 31, 2021, was

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
Section: Chapter Questions
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.An entity entered into a one-year tenancy contract from March 1, 2021, to February 28, 2022. The
monthly rental was P90,000. For the year ended December 31, 2021, the entity paid P1,080,000
for the contract and recorded it as rental expenses. The profit for the year ended December 31,
2021, was
overestimated by P900,000
overestimated by P180,000
O underestimated by P900,000
underestimated by P180,000
Transcribed Image Text:.An entity entered into a one-year tenancy contract from March 1, 2021, to February 28, 2022. The monthly rental was P90,000. For the year ended December 31, 2021, the entity paid P1,080,000 for the contract and recorded it as rental expenses. The profit for the year ended December 31, 2021, was overestimated by P900,000 overestimated by P180,000 O underestimated by P900,000 underestimated by P180,000
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