Quell Company purchased a varnishing machine for P3,000,000 on January 1, 2020. 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. 1. What is the carrying amount of the asset on December 31, 2020? a. 3,000,000 b. 2,250,000 c. 2,500,000 d. 1,875,000 2. What amount of income from the government grant is recognized for 2020? 500,000 b. 125,000 a. 250,000 d. с. 0.
Quell Company purchased a varnishing machine for P3,000,000 on January 1, 2020. 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. 1. What is the carrying amount of the asset on December 31, 2020? a. 3,000,000 b. 2,250,000 c. 2,500,000 d. 1,875,000 2. What amount of income from the government grant is recognized for 2020? 500,000 b. 125,000 a. 250,000 d. с. 0.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 2RE: Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual...
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