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

Pinky and the Brain Ltd acquired an item of plan at a gross cost of $680,000 on October 20X2. The plant has an estimated life of 10 years with residual value equal to 15% of its gross cost. The company uses straight line depreciation charge on a time-apportioned basis. The company received a government grant of 30% of its cost price at the time of its purchase. The terms of the grant are that if the company retains the asset for four years or more, then no repayment liability will be incurred. If the plant is sold within four years a repayment on a sliding scale would be applicable. The repayment is 75% if sold within the first year of purchase and this amount decreases by 25% per annum. Pinky and the Brain Ltd has no intention to sell the plant within the first four years. The company's accounting policy for capital based government grants is to treat them as deferred credits and release them to income over the life of the asset to which they relate. Required: a. Discuss whether the…

Zara corporation decided to exchange its old machine that costs $100,000 with a new one. On January 1, 2020, the company exchanged the old machine for a new one paying $15,000 cash and giving the old machine. On the date of exchange the old machine had an accumulated depreciation of $60,000 and fair value of $80,000. As a result of the exchange the company recognized: * O Gain $40,000 Gain $20,000 O Loss $45,000 O Loss $65,000 No gain or Lss Back Next Page 11 of 12

Pearl Limited purchased an asset at a cost of $20,000 on March 1, 2023. The asset has a useful life of seven years and an estimated residual value of $2,200. For tax purposes, the asset belongs in CCA Class 8, with a rate of 20%. (a) Calculate the CCA for each year, 2023 to 2026, assuming Pearl's asset is eligible for the Accelerated Investment Incentive, and that this is the only asset in Class 8. 2023 2024 2025 2026 2024 2025 CCA 2026 $ TA (b) How would the calculation for each year from 2024 to 2026 change if the asset had been purchased in 2024? $ $ $ tA tA $ CCA

Pineapple Ltd applied for a government grant of $1,000,000 on 5 January 2017 to cover part of the cost of a new machine. The grant was approved on 1 February 2017 and the government released the fund on 1 April 2017. Pineapple purchased the machine for $5,000,000 with cash on 1 June 2017 and the machine was used for production The machine was depreciated over its estimated useful life of 10 years on method and depreciation was calculated monthly. Pineapple Ltd prepared statements at 31 December each year. (a)  On which date should Pineapple Ltd recognize the government grant? Explain. (b)  Assume Pineapple Ltd recognized the government grant as deferred income. Prepare the extracts of statement of financial position and the statement of profit or loss for the year ended 31 December 2017. Show your workings. (c)  The life of a business is divided into specific time periods, usually a year, to measure results of operations for each such time period and to portray financial…