What should be the carrying amount of the machine as of December 31, 2021? QUESTION 2: What is the deferred income balance at December 31, 2021?
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Maroon Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P81,000 in respect of this asset. It is the policy of the entity to
QUESTION 1:
What should be the carrying amount of the machine as of December 31, 2021?
QUESTION 2:
What is the deferred income balance at December 31, 2021?
QUESTION 3:
What is the realized income from government grants in 2022??
Step by step
Solved in 3 steps
- ABC Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P 81,000 in respect of this asset. It is the policy of the entity to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. 1) What should be the carrying amount of the machine as of December 31, 2021? P 409,500 P 675,000 P 450,000 P 490,500 2) What is the deferred income balance at December 31, 2021? P 60,750 P 81,000 P 0 P 40,500 3) What is the realized income from government grants in 2022?? P 81,000 P 40,500 P 60,750 P 20,2507. Karen Company purchased a varnishing machine for P3,000,000 on January 1, 2019. 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. How much deferred income from the government grant will be presented in the statement of financial position for 2019?Rigg Owusu Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value. The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. Account for this grant under the netting off method.
- 1. Patriotic Company purchased a machine for P6,000,000 on January 1, 2019, and received a government grant of P600,000 toward the asset cost. The accounting 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 10 years with a residual value of P500,000. On January 1, 2021, the grant becomes fully repayable because of noncompliance with conditions. What is the depreciation for 2019? What is the depreciation for 2021? What is the carrying amount of the machinery at the end of 2021? What is the depreciation for 2022?1. E. Adentwi Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value.The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. required :Account for this grant under the netting off method. 2. Polycarp Ltd adopts revaluation model for subsequent measurement of its intangible assets in accordance with IAS 38: Intangible assets. The policy of Polycarp is to revalue its intangible asset at the end of each year. An intangible asset with an estimated useful life of 9 years was acquired on 1 January 2018 for GH¢45,000. It was revalued to GH¢54,400 on 31 December 2018 and the revaluation surplus was correctly recognized on that date. As at 31 December 2019, the asset was revalued at GH¢32,000.Required:Discuss the accounting treatment required in 2018 and 2019 financial statements.Racquel Company purchased a machine for P3,000,000 on January 1, 2020. The entity received a government grant of P500,000 in respect of this asset The policy is to depreciate the asset over 5 years on a straight line basis and to treat the grant as deferred income On January 1, 2022, the grant became fully repayable because of noncompliance with conditions Determine: 1.) Deferred Grant Income reported in the company's statement of financial position as of December 31, 2021, if deferred income approach was used. 2.) Machinery - net reported in the company's statement of financial position as of December 31, 2021, if deduction from asset approach was used. 3.) Depreciation expense reported in the statement of profit of loss for 2022, if deduction from asset approach was used. 4.) Amount of loss on noncompliance with the conditions of the grant.
- Natalie Company purchased a machine for P6,600,000 on January 1, 2021 and received a government grant of P600,000 towards the capital cost. The policy is to treat the grant as reduction in the cost of asset. The machine is to be depreciated on a straight light basis over 10 years with a residual value of P500,000. On January 1, 2023, the grant became fully repayable because of noncompliance with conditions. What is the depreciation for 2021? What is the depreciation for 2023?On january 1, 2022, Sarah Company purchased a machine for 8,500,000 and received a government grant of 1,000,000 toward the asset cost. The accounting 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 5 years with a residual value of 500,000. On january 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What amount should be reported as depreciation for 2022? a. 1,700,000 b. 1,600,000 c. 1,500,000 d. 1,400,000 2. What amount should be reported as depreciation for 2024? a. 1,400,000 b. 1,800,000 c. 1,600,000 d. 2,000,000Natalie 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
- On January 1, 2021, Entity A received land with fair of PHP 200,000 from the government conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 2021 for a total cost of PHP 1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the depreciation expense recognized in 2023 under the following presentation? Gross Presentation a. 100,000 Net Presentation 80,000 b. 100,000 80,000 c. d. 80,000 100,000 100,000 80,000On January 1, 2021, Entity A received land with fair of PHP 200,000 from the govemment conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 2021 for a total cost of PHP 1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the income from the government grant in 2021 and 2022 respectively? 2021 2022 a. 0 b. 200,000 200,000 c. 0 d. 20,000 20,000 20,000On January 1, 2020, ABC corporation received P8,000,000 from the City of Caloocan to construct an overpass in the intersection of Camarin. The cost of the overpass is P25,000,000, with a useful life of 20 years. How much is the carrying value of the overpass as of December 31, 2021 assuming ABC used the deduction to asset approach?
