E10.21 (LO3) (Government Grants) Rialto Group received a grant from the government of £100,000 to acquire £500,000 of delivery equipment on January 2, 2019. The delivery equipment has a useful life of 5 years. Rialto uses the straight-line method of depreciation. The delivery equipment has a zero residual value. Instructions A. If Rialto Group reports the grant as a reduction of the asset, answer the following questions. 1. What is the carrying amount of the delivery cquipment on the statement of financial position at December 31I, 2019? 2. What is the amount of depreciation expense related to the delivery equipment in 2020? 3. What is the amount of grant revenue reported in 2019 on the income statement? B. If Rialto Group reports the grant as deferred grant revenue, answer the following questions. 1. What is the balance in the deferred grant revenue account at December 31, 2019? 2. What is the amount of depreciation expense related to the delivery equipment in 2020? 3. What is the amount of grant revenue reported in 2019 on the income statement? Yilmaz SA is

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 85P

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E10.21 (LO3) (Government Grants) Rialto Group received a grant from the government of £100,000 to acquire £500,000 of delivery equipment on January 2, 2019. The delivery equipment has a useful life of 5 years. Rialto uses the straight-line method of depreciation. The delivery equipment has a zero residual value.

Instructions

A. If Rialto Group reports the grant as a reduction of the asset, answer the following questions.

1. What is the carrying amount of the delivery cquipment on the statement of financial position at December 31I, 2019?

2. What is the amount of depreciation expense related to the delivery equipment in 2020?

3. What is the amount of grant revenue reported in 2019 on the income statement?

B. If Rialto Group reports the grant as deferred grant revenue, answer the following questions.

1. What is the balance in the deferred grant revenue account at December 31, 2019?

2. What is the amount of depreciation expense related to the delivery equipment in 2020?

3. What is the amount of grant revenue reported in 2019 on the income statement? Yilmaz SA is

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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