6: Part 1: On 1 Jan 2018 Co A acquires equipment for its manufacturing plant and receives a government grant of 400,000 towards its cost. The equipment costs 1,200,000 and has a useful life of five years. Its residual value is nil. It is depreciated on a straight- line basis. Requirement: Explain how the grant will be dealt with in the financial statements and show workings and relevant entries in Income Statement and Balance sheet for the year ended 31 Dec 2018 if (i) the grant is treated as deferred income (ii) the grant is deducted from the cost of the asset. Part 2: Co D acquires a machinery for 800,000 on 1 Jan 2008. This machinery is depreciated on a straight-line basis over its useful economic life which is estimated to be 20 years. On 1 Jan 2016, the company revalues the machinery to be 560,000 using revaluation model. The machinery was sold on 1 Jan 2019 for 5000,000. Co Ds year end is 31 Dec. Required: A . Clearly show cost, accumulated depreciation and carrying value of the machinery as of 1 Jan 2016 before revaluation. Show accounting entries on 1 Jan 2016 when plant is revalued. B - Show accounting entries on disposal of the machinery on 1 Jan 2019.Part 3: Impairment Roland Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $10,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Rolands equipment. Rolands controller estimates that expected future net cash flows on the equipment will be $6,300,000 and that the fair value of the equipment is $5,600,000. Roland intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Roland uses straight-line depreciation. Instructions a. Prepare the journal entry (if any) to record the impairment at December 31, 2020. b. Prepare any journal entries for the equipment at December 31, 2021. The fair value of the equipment at December 31, 2021, is estimated to be $5,900,000. c. Repeat the requirements for (a) and (b), assuming that Roland intends to dispose of the equipment and that it has not been disposed of as of December 31, 2021. Part 4: Decommissioning costs Oil Products Company purchases an oil tanker depot on January 1, 2020, at a cost of $6,000,000. Oil Products expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $750,000 to dismantle the depot and remove the tanks at the end of the depots useful life. Required: a. Prepare the journal entries to record the depot and decommissioning costs for the depot on January 1, 2020. Use interest rate of interest rate of 6%. b. Prepare any journal entries required for the depot and the decommissioning costs at December 31, 2020. Oil Products uses straight-line depreciation; the estimated salvage value for the depot is zero