Natalie 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

Natalie 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

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 44P

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