Aiden Limited is planning to enlarge its factory in an economically challenged area of Canada. The federal, provincial, and municipal governments are all keen to assist the firm in making this investment successful, and hopefully generate permanent and significant economic and social benefits for the region. Collaboratively the three levels of government and the company have made the following commitments: (Click the icon to view the commitments.) Required Requirement a. Prepare journal entries to record each of the seven items described above for the first year. Assume all estimates and expectations for the first year are correct and the factory is built and operational in the first year. Aiden Limited uses the net method to record grants. No depreciation will be accrued in the first year. (Enter all amounts as complete numbers with appropriate number of zeros and without abbreviation. Record debits first, then credits. Explanations are not required. If an entry is not appropriate for one of the items in the first year, select "No entry" in the first line of the account column and leave the rest of the cells blank.) i. The company will build a factory that will cost $70,000,000 Date Accounts Debit Credit i. ii. The city will donate the land for the factory, which has a fair market value of $7,500,000. Upon completing construction the legal title of the land will be transferred to the company. Date Accounts Debit Credit ji iii. For the next five years, the city will reduce the property and municipal taxes the company has to pay on the new factory by 10%. It is estimated that these taxes would be $1,400,000 per year before the discount Date Accounts Debit Credit ini iv. The federal government will provide a forgivable loan to assist in the financing of the factory of $3,500,000. The loan will be forgiven over five years if the company employs at least 220 workers per year in the new factory. Aiden Limited uses the net method to record grants. Date Accounts Debit Credit iv. Required Requirements a. Prepare journal entries to record each of the seven items described above for the first year. Assume all estimates and expectations for the first year are correct and the factory is built and operational in the first year. Aiden Limited uses the net method to record grants. No depreciation will be accrued in the first year. b. What will be the annual depreciation expense for the factory starting in year two? Aiden Limited uses the net method to record grants. The factory is expected to have useful life of 30 years (excluding the first year in the start-up phase) and no material residual value. The company uses the straight-line method for depreciation. C. By how much was net income increased because of government assistance in the first year? For the second year, assume all continuing conditions to be eligible for the grants are met. How much was net income increased by in the second year? Ignore income taxes. Print Done iv. The federal government will provide a forgivable loan to assist in the financing of the factory of $3,500,000. The loan will be forgiven over five years if the company employs at least 220 workers per year in the new factory. Aiden Limited uses the net method to record grants. Date Accounts Debit Credit iv. v. For the next five years, the provincial government will provide a training subsidy of $1,500,000/year to the company for the employment and skill development of local residents. Date Accounts Debit Credit vi. The federal government will give the company immediately a $1,000,000 grant for having had a factory in the region for the past 10 years. Aiden Limited uses the net method to record grants. Date Accounts Debit Credit vi. vii. The federal government will give the company $8,000,000 in five years if it maintains an average workforce of 670 workers employed at the new factory. During the first year an average of 245 workers were employed as the factory was in the start-up stage. Date Accounts Debit Credit vii Requirement b. What will be the annual depreciation expense for the factory starting in year two? Aiden Limited uses the net method to record grants. The factory is expected to have useful life of 30 years (excluding the first year in the start-up phase) and no material residual value. The company uses the straight-line method for depreciation. (Round to the nearest whole dollar.) Annual depreciation Requirement c. By how much was net income increased because of government assistance in the first year? For the second year, assume all continuing conditions to be eligible for the grants are met. How much was net income increased by in the second year? Ignore income taxes. (Enter a "0" if an item does not affect income in certain year. Round any calculations to the nearest whole dollar.) Item Year 1 Year 2 Total