Question
How to get the deferred income method for grants|: New factory plant and machinery was purchased in October 2019 for 90,000 cash. This plant has
How to get the deferred income method for grants|:
New factory plant and machinery was purchased in October 2019 for 90,000 cash. This plant has a useful life of 5 years. On the same date a government grant of 30,000 was received towards the purchase of the grant. Neither the purchase of the machine or the receipt of the grant was recorded in the financial statements. Dallas Ltd accounts for capital based grants by setting up a deferred grant income account. Depreciation is charged straight line over the life of this plant with a full year charged in the year of purchase and none in the year of sale. The original plant and equipment in the trial balance is depreciated at 20% on a reducing balance basis. Depreciation of all plant and equipment is charged to the cost of sales
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started