The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount of income from the government grant is recognized in 2017?
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Queen Company purchased a varnishing machine for P3,000,000 on January 1, 2017. The entity received a government grant of P500,000 in respect of this asset. The accounting policy is to
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- The NCR Company purchased a varnishing machine for P150,000 on January 1, 2017.The company received a government grant of P13,500 in respect of this asset. Company policy was to depreciate the asset over 4 years on a straight-line basis and to treat the grant as deferred income.Under PAS20 Government grants and government assistant, what should be the carrying amounts of the machine and the deferred income (DI) balance at December 31, 2018? a. Carrying amount – P75,000 ; DI balance – P6,750 b. Carrying amount – P112,500 ; DI balance – P10,125 c. Carrying amount – P81,750 : DI balance – P6,750 d. Carrying amount – P75,000 ; DI balance – P13,500Keshia Company purchased a machine for P3,000,000 on January 1, 2022. The entity received a government grant of P500,000 in respect to this asset. The policy is to depreciate the asset over five years on a straight line basis and to treat the grant as deferred income. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. What is the loss on repayment of grant in 2024? A. 500,000 В. 300,000 С. 200,000 D. 100,0007. Karen Company purchased a varnishing machine for P3,000,000 on January 1, 2019. The entity received a government grant of P500,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. How much deferred income from the government grant will be presented in the statement of financial position for 2019?
- On january 1, 2022, Sarah Company purchased a machine for 8,500,000 and received a government grant of 1,000,000 toward the asset cost. The accounting policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over 5 years with a residual value of 500,000. On january 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What amount should be reported as depreciation for 2022? a. 1,700,000 b. 1,600,000 c. 1,500,000 d. 1,400,000 2. What amount should be reported as depreciation for 2024? a. 1,400,000 b. 1,800,000 c. 1,600,000 d. 2,000,000In 2016 Sanford LTD. received a government grant of $100,000 to be used for the purchase of a machine. Sanford prepares its financial statements using IFRS. The grant must be recognized a. as revenue in 2016. b. as a reduction in the cost of the machine. c. as deferred income in the balance sheet and then recognized in the income statement systematically over the asset’s useful life. d. either b or c.Maroon Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P81,000 in respect of this asset. It is the policy of the entity to depreciate the asset over 4 years on a straight Ine basis and to treat the grant as deferred income.QUESTION 1:What should be the carrying amount of the machine as of December 31, 2021?QUESTION 2:What is the deferred income balance at December 31, 2021?QUESTION 3:What is the realized income from government grants in 2022??
- Racquel Company purchased a machine for P3,000,000 on January 1, 2020. The entity received a government grant of P500,000 in respect of this asset The policy is to depreciate the asset over 5 years on a straight line basis and to treat the grant as deferred income On January 1, 2022, the grant became fully repayable because of noncompliance with conditions Determine: 1.) Deferred Grant Income reported in the company's statement of financial position as of December 31, 2021, if deferred income approach was used. 2.) Machinery - net reported in the company's statement of financial position as of December 31, 2021, if deduction from asset approach was used. 3.) Depreciation expense reported in the statement of profit of loss for 2022, if deduction from asset approach was used. 4.) Amount of loss on noncompliance with the conditions of the grant.1. Patriotic Company purchased a machine for P6,000,000 on January 1, 2019, and received a government grant of P600,000 toward the asset cost. The accounting policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight-line basis over 10 years with a residual value of P500,000. On January 1, 2021, the grant becomes fully repayable because of noncompliance with conditions. What is the depreciation for 2019? What is the depreciation for 2021? What is the carrying amount of the machinery at the end of 2021? What is the depreciation for 2022?On January 1, 2021, Raquel Company purchased a machine for 3,000,000. The entity received a government grant of 500,000 in respect of this asset. The policy is to depreciate the asset over 5 years on a straight line basis and to treat the grant as deferred income. On January 1, 2023, the grant became fully repayable because of non compliance with conditions. Required: Prepare journal entries for 2021, 2022 and 2023.
- On 1 January 2018, Sharp Limited (Sharp) applied for a government grant of $20 million to finance the acquisition of a specialized machine for $40 million. The grant was subject to an inspection by government officials on the machine and an operating license would be issued upon the satisfactory inspection. Sharp obtained the license on 1 April 2018 but the funds were not released by the government until 1 July 2018. Sharp purchased the machine and started using it on 1 October 2018. The machine is depreciated at 20% per annum on cost using straight-line basis. On 1 January 2019, Sharp has to pay back $10 million to the government due to non- fulfillment of the required conditions of using the machine. Sharp prepares its financial statements at 31 December each year. Required: (a) With reference to HKAS 20, on which date should Sharp recognize the government grant? Explain. (b) Sharp recognizes the government grant as deferred income. Prepare the accounting journal entries…ABC Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P 81,000 in respect of this asset. It is the policy of the entity to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. 1) What should be the carrying amount of the machine as of December 31, 2021? P 409,500 P 675,000 P 450,000 P 490,500 2) What is the deferred income balance at December 31, 2021? P 60,750 P 81,000 P 0 P 40,500 3) What is the realized income from government grants in 2022?? P 81,000 P 40,500 P 60,750 P 20,250Natalie Company purchased a machine for P6,600,000 on January 1, 2022 and received a government grant of P600,000 towards the capital cost. The policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over ten years with a residual value of P500,000. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What is the depreciation for 2022? A. 610,000 B. 600,000 C. 660,000 D. 550,000 2. What is the depreciation for 2024? A. 610,000 B. 600,000 C. 780,000 D. 730,000