Problem 2 On July 1, 2015, DreamDad Inc., which has a calendar year accounting period, received a government grant of P 2 million, six months into the financial year, to subsidize the cost of building a new training center for its employees and to develop a new training scheme. When DreamDad applied for the grant, it estimated that P 1,500,000 would be applied to the building and the remainder for the development of the scheme. The training center is estimated to cost P5 million to build and will have a 20-year life. The HR Department has started to write the training program, which was completed at the end of this financial year. Required: Prepare entries to give effect to the above transactions. Fill out the amounts of below journal entries. Year 1: Cash Deferred government grant income Government grant income Deferred government grant income Government grant income Following years: Deferred government grant income Government grant income

Problem 2 On July 1, 2015, DreamDad Inc., which has a calendar year accounting period, received a government grant of P 2 million, six months into the financial year, to subsidize the cost of building a new training center for its employees and to develop a new training scheme. When DreamDad applied for the grant, it estimated that P 1,500,000 would be applied to the building and the remainder for the development of the scheme. The training center is estimated to cost P5 million to build and will have a 20-year life. The HR Department has started to write the training program, which was completed at the end of this financial year. Required: Prepare entries to give effect to the above transactions. Fill out the amounts of below journal entries. Year 1: Cash Deferred government grant income Government grant income Deferred government grant income Government grant income Following years: Deferred government grant income Government grant income

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter3: Corporations: Introduction And Operating Rules

Section: Chapter Questions

Problem 51P

See similar textbooks

Similar questions

Please answer the following questions with complete solution. Thank you so much. I need those 2 questions. Please answers it!! 1. XYZ Inc. started construction of a new plant facility on January 1, 2018 with specific borrowings amounted to P4,000,000; 10% interest and one-year term. Part of specific borrowings were used for other business requirements. Interest income earned while the loan is not yet fully utilized amounted to P24,000 which was received on September 1, 2018. Expenditures for the new plant facility amounted to P3,600,000 which was incurred evenly during the year. Question: What is the capitalizable borrowing cost? 2. On January 1, 2016, Leyte Company received a P24,000,000 government grant from the Philippine Government to compensate for costs to be incurred in restoring an open field destroyed by a typhoon “Yolanda”. The Company will incur the following costs: P1,000,000 for 2016; P4,000,000 for 2017 and P7,000,000 for 2018. What is the amount of income from…
2. The company is setting aside funds to acquire a property for its new warehouse. The company needs P74,735 to make the down payment. The company deposits P5,000/month in the fund account which pays 1% per month. As the financial manager you have been tasked to determine how long it will take to accumulate enough funds to acquire the property?
1. The company is setting aside funds to acquire a property for its new warehouse. The company needs P74,735 to make the down payment. The company deposits P5,000/month in the fund account which pays 1% per month. As the financial manager you have been tasked to determine how long it will take to accumulate enough funds to acquire the property?
Your Question: Hua Fat Technology Ltd Case Hua Fat Technology Ltd (Hua Fat) is a global telecommunication equipment manufacturer. The company was granted a piece of land by the government to develop its 5G business. On 1st January 2018, the company started to construct a property at the site. The property was used as a testing laboratory (the laboratory) to serve the company’s customers. The construction costs relating to the laboratory were: $000 Cost of construction materials before trade discount of 10% 50,000 Salary of construction workers for six months to 30 June 2018 4,800 Overheads related to the construction 3,600 Payment to external consultants related to the construction 2,000 Expected dismantling and restoration costs (note 3) 400 Notes: Hua Fat…
Problem 1: On Febuary 14, 2018, Floating Restaurant Company established a sales agency in Loboc. Upon establishment of the sales agency, the home office sent samples costing ₱8,000 and a working fund of ₱8,000 to be maintained on the imprest baisis. During the six months period, the sales agency reported to the home office sales orders. These were billed at ₱70,000 of which of ₱40,000 was collected) the sales agency paid expenses of ₱5,800 but was reimbursed by the home office. On August 15, 2018, the sales agency samples was valued at ₱2,000. It was estimated that the gross profit on goods shipped to fill sales order averaged 40% of cost. Required: Show the solution. 1.) The cost of sales of the sales agency for the six months period is 2.) The net income of the sales agency for the six months period is Problem 2: JCO KREMES Company had an agency in SM Cebu and a working fund for ₱20,000 is established on the imprest basis. The first payment from the fund is ₱3,000 for rent. This…
Q3. Classify the following items as either revenue or capital expenditure: Annual service costs for a courier firm’s fleet of vans. Replacement of rubber tread on a printing press with a plastic one that has resulted in the useful economic life of the printing press being extended by three years. A new bicycle purchased by a newsagent for use by the newspaper delivery boy.
Question 1 On January 1, 2017 Baker purchased a new stamping machine for its plant. This new piece of equipment cost $120,000 and was recorded in Baker's accounting system with a $120,000 debit to the Equipment account and a $120,000 credit to the Cash account. Baker estimates that the stamping machine will last 5 years and will have no value at the end of those 5 years. At the end of January, February, March, April, and May, Baker made the correct depreciation adjusting entries. Select the June 30, 2017 adjusting entry Baker should make for June’s depreciation: (A) Accumulated depreciation: 2,000 ________ depreciation: expense _______ 2,000 (B) depreciation expense 12,000 _______ accumulated depreciation: ______ 12,000 (C) depreciation expense 2,000 ______ accumulated depreciation ______ 2,000 (D) depreciation espense 24,000 ________ cash _______ 2,000 loss of…
Cranston LTD. prepares its financial statements according to International Financial Reporting Standards. InOctober 2018, the company received a $2 million government grant. The grant represents 20% of the total cost ofequipment that will be used to improve the roads in the local area. Cranston recorded the grant and the purchaseof the equipment as follows:Cash ................................. 2,000,000Revenue....................... 2,000,000Equipment....................... 10,000,000Cash ............................. 10,000,000Required:1. Explain the alternative accounting treatments available to Cranston for accounting for this government grant.2. Prepare any necessary correcting entries under each of the alternatives described in requirement 1.
Cool Runnings Corp. plans to construct a building after 5 years. The Chief Financial Officer suggested that the company should appropriate retained earnings and set aside cash to prepare the needed funds for the building. It was estimated that they will most likely spend ₱40 Million. How much cash should be invested today if a time deposit will pay 6% annually? (Provide solution/ explanation) a. ₱28,198,422 b. ₱29,848,616 c. ₱29,890,327 d. ₱31,341,047
The question number 1 I already aswered, please send me just the 2 question. Mack Company, HappyDay’s branch, plans to invest $50,000 in land that will produce annual rent revenue equal to 15 percent of the investment, starting on January 1, Year 3. The revenue will be collected in cash at the end of each year, starting December 31, Year 3. Mack can obtain the cash necessary to purchase the land from two sources. Funds can be obtained by issuing $50,000 of 10 percent, five-year bonds at their face amount. Interest due on the bonds is payable on December 31 of each year with the first payment due on December 31, 2021. Alternatively, the $50,000 needed to invest in land can be obtained from equity financing. In this case, the stockholders (holders of the equity) will be paid a $5,000 annual cash dividend. Mack Company is in a 30 percent income tax bracket. 1. Prepare an income statement and statement of cash flows for Mack Company…
2. The Ombudsman Foundation is a private nonprofit organization providing dispute resolution and conflict management training. The Foundation had the following preclosing trial balance at December 31, 2024, the end of its fiscal year: Account: Debits Credits Accounts payable $ 37,500 Accounts receivable (net) $ 57,000 Accrued interest receivable 15,500 Accumulated depreciation 3,162,500 Cash 109,000 Contributed services 35,000 Contributions—no restrictions 2,310,000 Contributions—purpose restrictions 780,000 Contributions—endowment 2,650,000 Current pledges receivable 75,000 Education program expenses 1,607,000 Fund-raising expenses 201,000 Investment revenue—purpose restrictions 86,000 Training seminars expenses 4,456,000 Land, buildings, and equipment 5,500,000 Long-term investments 2,690,000 Management and general expenses 365,000 Net assets without donor restrictions 448,000 Net assets with donor…
Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The building is expected to take 18 months to complete. Christopher invests the money from the project until it is needed for construction. He is currently earning 10%. The following is the expenditures as they relate to the construction of the building.January 1$1,500,000April 1$1,850,000October 1$1,100,000December 31$1,000,000Required: 2. Compute the amount of interest revenue Christopher would recognize.