A company receives a $20\%$ grant towards the cost of a new item of machinery, which cost

$$100,000.$ The machinery has an expected life of four years and a nil residual value. The expected

profits of the company, before accounting for depreciation on the new machine or the grant,

amount to $$50,000$ per annum in each year of the machinery's life. Show the necessary

accounting treatment under both the methods: $($i$)$ Reducing the cost of the asset $($ii$)$ Treating