What is the grant income for the year 2021?
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
Chapter12: Intangibles
Section: Chapter Questions
Problem 7MC
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On january 2 2021 brand company received a grant of P60,000,000 to compensate it for costs it incurred i planting trees over a period of five years. Brand company will incur such cost in this manner: 2021 2,000,000 2022 4,000,000 2023 6,000,000 2024 8,000,000 2025 10,000,000 actual costs incurred in the planting trees showed 2,000,000 and 4,000,000 in years 2021 and 2022, respectively. However in 2023 and 2024 the company has stopped planting trees. Due to the non fulfillment of its obligation, the government is demanding an immediate repayment of the grant in the amount of 50,000,000 which is considered reasonable. What is the grant income for the year 2021?
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