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Posted on Sep 08, 2024

Happy Kids Childcare (HKC) received a $3,000 federal grant to install a solar hot water system at one of its locations on November 1, 2019.

Happy Kids Childcare (HKC) received a $3,000 federal grant to install a solar hot water system at one of its locations on November 1, 2019. The system costs $10,000 to install, has a useful life of 10 years, and has a residual value of $500. The installation was completed on January 1, 2020. HKC reports under IFRS. Assuming that HKC uses the gross method to report government grants, how much of this grant will it recognize for the year ended December 31, 2020?

Question options:

A

$0

B

$300

C

$950

D

$3,000

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