On Jan 1, 2019 Silver Mine Inc, received a grant of $200,000 from the local government to acquire foundry equipment. The equipment cost $2,000,000. It had a life of 4 years and no residual value. Silver Mine uses straight-line depreciation.

Q1b. Assume Silver Mine reports the grant as a reduction of the asset. [ mark for each wholly correct answer].

What is the carrying value of the foundry equipment after adjusting and closing entries have been completed on Dec 31, 2019?

Answer: $

What is depreciation expense related to the foundry equipment in 2020?

Answer: $

What amount of grant revenue will Silver Mine recognize in 2021?

Answer: $

How much lower will the income of Silver Mine be over the 4-year period, when it reports the grant as a reduction of the asset instead of deferred revenue?

Answer: $