Industrial Development Corporation (IDC) granted Naseer Pty(Ltd) R20 000 on 01 January 2021 to assist in the purchase of a manufacturing plant. The grant was conditional upon Naseer Pty(Ltd) purchasing the plant and manufacturing for a period of at least two unbroken years. If the conditions of the grant were not met, the terms of the grant required that the grant be repaid in full, immediately. The plant was purchased on 3rd January 2021 for R200 000 and was depreciated on the straight-line basis over its useful life of 4 years to a nil residual value. Other information: - Naseer ceased manufacturing on 31 March 2022 due to unforeseen circumstances. - The asset was not considered to be impaired and Naseer intended to resume manufacturing on the next yea
Industrial Development Corporation (IDC) granted Naseer Pty(Ltd) R20 000 on 01 January 2021 to assist in the
purchase of a manufacturing plant.
The grant was conditional upon Naseer Pty(Ltd) purchasing the plant and manufacturing for a period of at
least two unbroken years. If the conditions of the grant were not met, the terms of the grant required that the
grant be repaid in full, immediately.
The plant was purchased on 3rd January 2021 for R200 000 and was
over its useful life of 4 years to a nil residual value.
Other information:
- Naseer ceased manufacturing on 31 March 2022 due to unforeseen circumstances.
- The asset was not considered to be impaired and Naseer intended to resume manufacturing on the
next year.
- Ignore the effect of tax and VAT.
- Assume that Naseer Pty(Ltd) recognises grants as grant income.
- The year end is 31 December
Required:
a) Show the
March 2022. Cleary show the journal narrations.
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