Should not be recognized as income Should be recognized as income immediately Should be recognized as income over 40 years Should be recognized as income over the periods which bear the cost
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Government grant related to non-
- Should not be recognized as income
- Should be recognized as income immediately
- Should be recognized as income over 40 years
- Should be recognized as income over the periods which bear the cost of meeting the conditions
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- Which of the following is not considered a limit on the immediate expensing election of Section 179? Fifty percent of qualified improvement property Total Section 179 -eligible property acquired in excess of $3,570,000 The taxable income of the taxpayer considering all income and deductions except for Section 179 immediate expensing An annual limit of $1,020,000 None of the aboveDefinitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxesChoose the letter of the correct answer At the beginning of the current year, an entity purchased an equipment for P 4,000,000 and received government grant of P 500,00 with respect to this asset. The equipment is depreciated on a straight-line basis over 5 years. The residual value of the equipment is P 200,000. The entity use deduction from asset approach. What would be the journal entry to recognize the grant income for the year? a. Debit to Deferred grant income P 660,000 and Credit to Grant income P 660,000b. Debit to Deferred grant income P 760,000 and Credit to Grant income P 760,000c. Debit to Deferred grant income P 100,000 and Credit to Grant income P 100,000d. None
- Which of the following adjustments would likely be made when moving from governmental funds financial statements to government-wide financial statements? a. Record an additional expense for compensated absences b. Record an additional expense related to salaries earned at year-end c. Both of the above d. Neither of the aboveDuring the current year, a government buys land for $80,000. Which of the following is not true? Choose the correct.a. The land could be reported as an asset by the business-type activities in the government-wide financial statements.b. The land could be reported as an asset by the governmental activities in the government-wide financial statements.c. The land could be reported as an asset by the proprietary funds in the fund financial statements.d. The land could be reported as an asset by the governmental funds in the fund financial statements.Noncash contributions received by a not-for-profit entity should be recognized on the date received at Select one: a.fair value. b.the amount specified by the donor. c.fair value less an allowance for impairment. d.the future value of the future cash flows as of the end of the asset's estimated useful life.
- Topic: Government Grants Entity A received land with fair value of P 200,000 from the government conditioned with the construction of a building on the lot. Entity A started immediately the construction and it was completed on Dec. 31, 2021 for a total cost of P 1,000,000. The building has an estimated useful life of 10 years with no residual value. How much is income from the government grant in 2021 and 2022? a. P 0 and P 200,000, respectively b. P 0 and P 20,000, respectively c. P 200,000 and P 0, respectively d. P 20,000 and P 20,000, respectivelyOn January 1, 20x1, Entity A receives a financial aid from the government amounting to ₱1M as compensation for losses it has incurred on a recent calamity. How much income from government grant will Entity A recognize in 20x1? 1,000,000 3 53,334 100,000 4. 0This topic is about government grants. Choose the letter of correct answer. On Sept. 1, 2021, Entity A, a private university, receives P 1,000,000 cash as government grant conditioned on acquisition of computers to be used in Entity's A I.T. Department. Entity A acquires the computer on Nov. 1, 2021 at which date the computers are available for their intended use. Entity A recognize depreciation on a monthly basis. When should Entity A starts recognizing income from the government grant? a. September 1, 2021 b. November 1, 2021 c. November 30, 2021 d. December 31, 2021 Entity A received land with fair value of P 200,000 from the government conditioned with the construction of a building on the lot. Entity A started immediately the construction and it was completed on Dec. 31, 2021 for a total cost of P 1,000,000. The building has an estimated useful life of 10 years with no residual value. How much is income from the government grant in 2021 and 2022?…
- What is the primary difference between revenue grants and capital grants in accounting for government grants? A. Revenue grants are recognized in the income statement immediately, while capital grants are recognized as deferred income. B. Revenue grants are used for long-term asset acquisition, while capital grants support day-to-day operating activities. C. Both revenue and capital grants are recognized in the income statement immediately. D. Capital grants are not accounted for in financial statements.Governmental funds report current financial resources. However, governmental funds alsoreport some current assets which are not financial resources. Which of the assets below is acurrent financial resource at December 31, 2022? A. Property taxes receivable expected to be collected between March 2 and December 31, 2023. B.Office supplies that will be used in 2023. C.A and B. D.Neither A nor B.Among the following transactions: municipal bond income. accrual of a loss contingency. a balance in the Unearned Rent account at year end. a fine resulting from violations of regulations. Which one(s) will result in a permanent difference in pretax financial income and taxable income? Enter 1, 2, 3, or 4 that represents the correct answer. b & c. d only. a & d. a, c, & d.