problem 24-7 (IFRS) Problem 24-4 (IFRS) Company purchased a machine for P3.000,000 on At the beginning of current year, Peach Company purchas Every 1, 20, The entity received a government grant of machine for P7.000,000 and received a government gram 1000 in respect of this asset. of P1,000,000 toward the capital cost. .. policy is to depreciate the Reset over 5 years on a straight The machine is to be depreciated on a straight line bag, basis and to treat the grant as deferred income. over 5 years and estimated to have a residual value of P500,000 at the end of this period. January 1. 202 2, the grant became fully repayable because / maccompliance with conditions. Required: Prepare journal entries for the current year assuming the Required: grant is accounted for as deferred income and deduction from ASBEL prepare journal entries for 2020, 2021 and 2022. Problem 24-5 (IFRS) Problem 24-8 (IFRS) At the beginning of current year, Apple Company purchased a plating machine for P5,400,000. The entity received a preposterous Company received a government grant of government grant of P400,000 toward this capital cost. paooo,000 related to a factory building that it purchased in January 2020 from an industrialist identified by the The machine is to be depreciated on a 20%% reducing balance pwrament. basis over 10 years. The estimated residual value is P200,000. The entity did not purchase the building. which was located Required: the slums of the city, it would have been repossessed by the government agency. Prepare journal entries for the current year, assuming the grant is accounted for as deferred income and deduction from The entity purchased the building for P12,000,000. The useful isSet We of the building is 5 years with ho residual value. Problem 24-6 (LAA) On January 1, 2021, the entire amount of the government Zephyr Company is provided a grant by a foreign government grant became repayable by reason of noncompliance with for the purpose of acquiring land for a building site. The moditions attached to the grant. grant is a zero-interest loan for 5 years evidenced by a promissory note. Required: The loan was granted on January 1, 2020 for P8,000:000. The Prepare journal entries assuming the government grant is market rate of interest is 6%. The present value of 1 for five periods at 6% is .7473. Accounted for using: Required: L Deferred income approach 2 Deduction from asset approach Prepare journal entries for 2020 and 2021. problem $4-3 (IFRS) Problem 23-24 Multiple choice (IAA) January 1, 2020, Optimistic Compa 1. A nonmonetary exchange is recognized at fair value of the powerement authority 5,000 hectare amet exchanged unleas For the slums outside the city limits. Ahectares of Land located Exchange has commercial substance b. Fair value is not determinable win up this land and lay tige attached to this grant was that the satily shall The assets are similar in nature my village where the land is best roads by employing laborers from d. The assets are dissimilar as government has fixed the minimum wage payable to the 2. In an exchange with commercial substance Gain or loss is recognized entirely. my zotire operation will take 3 years and is site P10,0901000. b. Gain or loss is not recognized. imated to c. Only gain should be recognized mis amount will be spent P2,000,000 for 2020, P2,090,000 d. Only losa should be recognized. headl, and P6,000.000 for 2021. The fair value of this land is P12,000,000, 3. The cost of property, plant and equipment noquired in an exchange is measured at the Required: . Fair value of the asset given plus cash payment. Prepare journal entries for the current year in connection with b. Fair value of the asset received plus cash payment. In grant Carrying amount of the asset given plus cash payment. Problem 24-3 (IFRS) d. Carrying amount of the asset received plus the cash payment At the beginning of current year, Exuberant Company received a consolidated grant of P12,000,000. 4. Which exchange has commercial substance? Thre fourths of the grant will be utilized to purchase a college n. Exchange of assets with no difference in future cash building for students from underdeveloped or developing flows. cuntries. b. Exchange by entities in the same line of business. The balance of the grant is for subsidizing the tuition coats of C. Exchange of asseta with difference in future cash flows those students for four years from the date of grant. Exchange of assets that causes the entities to remain in essentially the same economic position. The building was purchased in early part of January and is to be depreciated using straight line over 10 years. 5. For a nonmonetary exchange, the configuration of cash flows includes which of the following? The tuition costs paid in the current year amounted to P600,000, The implicit rate, maturity date of loan and amount of Joan