ia3 q.docx - Which of the following items is not part of...

Which of the following items is not part of the minimum lease
payments from
the standpoint of the lessee?
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 of
the PV factor to four decimal places, then do not round of during the