Bonita Limited was attracted to the Town of Mornington by the town's municipal industry commission. Mornington donated a plant site to Bonita, and the provincial government provided $168.000 toward the cost of the new manufacturing facility. The total cost of plant construction came to $423,000, and it was ready for use in early October 2020. Bonita expects the plant to have a useful life of 15 years before it becomes obsolete and is demolished. The company uses the straight-line method of depreciation for buildings and is required to include the plant in Class 6 (10% rate) for tax purposes. Your answer is partially correct. Prepare the entries that are required in 2020 to record the payment to the contractor for the building and the receipt of the provincial government assistance. Assume that the company treats the assistance as a reduction of the asset's cost. Also prepare any adjusting entries that are needed at the company's year ends, December 31, 2020 and 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter o for the amounts. Round answers to decimal places, es. 5.275.) No. Account Titles and Explanation Debit Credit 1. Buildings 423000 Cash 423000 (To record cash payments) Cash 2. 168000 Buildings 168000 (To record cash received) 3. Depreciation Expense Accumulated Depreciation-Buildings (To record depreciation for 2020) 4. Depreciation Expense 17000 17000 Accumulated Depreciation - Buildings (To record depreciation for 2021) Prepare the entries that are required in 2020 to record the payment to the contractor for the building and the receipt of the provincial government assistance. Assume that the company treats the government assistance as a deferred credit. Also prepare any adjusting entries that are needed at the company's yearends, December 31, 2020 and 2021. (Credit account the are automatically indented when the amount is entered Danoindent manually no entry is required, select "No Entry for the account dities and enter for the amounts. Round answers to decimal place 5.275) Debit Credit No. Account Titles and Explanation 1 Guide 427000 433000 (To record cash payments) 2 10000 TUBOOO Detured Revenue Government Grants (To record cash received) Depreciation Expense 3. 7050 2050 Accumulated Depreciation Building To record depreciation expense) Deferred Revenue-Government Grants 2800 Reverse Government Grants To record amortization of government assistance Depreciation Expert 26200 2200 Accumulated Depreciation Buildings (To record depreciation expense) Deferred Revenue Government Grants Revenue Government Grants 11200 To record amortization of government assistance) e Textbook and Media List of Accounts x Your answers incorrect If Bonita report: 2021 income of 599.000 before depreciation on the plant and government assistance, what income before tax will the company report assuming above Asuming (ovel (Round answers to decimal places 52752 Cost Reduction Method Deferral Method Income before $ S
