Question
PLS ANSWER ASAP!! Powder Company bought a machine for P 7,000.000 on January 1, 2020 and received a government grant of P 1,000,000 toward the
PLS ANSWER ASAP!!
Powder Company bought a machine for P 7,000.000 on January 1, 2020 and received a government grant of P 1,000,000 toward the capital cost. The machine is to be depreciated on a straight line basis over 5 years and estimated to have a residual value of P 500,000 at the end of this period. The accounting policy is to treat grant as a reduction to the cost of the machine.
QUESTION 1: What is the carrying amount of the asset on December 31, 2021?
P 3,800,000 P 5,700.000 P 4,400,000 P 4,200,000
QUESTION 2: What is the deferred grant income on December 31, 2021?
Zero P 800,000 P 400,000 P 600,000
QUESTION 3: What is the realized income from government grants in 2022?
Zero P 800,000 P 400,000 P 600,000
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