Hassan leases an office space from Rafi, Inc. in a non- renewable 10-year lease contract. Just after the second year of the lease, Hassan renovated the premises and made improvements at a cost of P1,200,000. These improvements are expected to last for 12 years. Compute Rafi's annual income form the leasehold improvement using the spread-out method

Hassan leases an office space from Rafi, Inc. in a non- renewable 10-year lease contract. Just after the second year of the lease, Hassan renovated the premises and made improvements at a cost of P1,200,000. These improvements are expected to last for 12 years. Compute Rafi's annual income form the leasehold improvement using the spread-out method

Hassan leases an office space from Rafi, Inc. in a non- renewable 10-year lease contract. Just after the second year of the lease, Hassan renovated the premises and made improvements at a cost of P1,200,000. These improvements are expected to last for 12 years. Compute Rafi's annual income form the leasehold improvement using the spread-out method




A. P50,000
B. P37,500
C. P30,000
D. P20,000


Answer: A. P50,000


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