Question One: (10 marks) a) General Engineering Ltd receives a government grant for $60,000 towards employee training costs to be incurred evenly over the next three years. Explain how this transaction will be reported in the financial statements. (4 marks) b) The following transactions relate to a dairy, converting milk to cheese, for the month of May: 1 May 1 May 2 May 3 May 4 May 14 May 16 May 28 May 28 May 30 May Bought 600 drums of milk from supplier, invoiced price being $90,000 Bought cartons, cost of $6,000 paid in cash Returned to supplier one drum damaged in transit, $150 500 drums of milk issued to cheesemaking department, cost $75,000 Issued two-thirds of cartons to cheesemaking department, $4000 Paid wages for cleaning and hygiene, $600 Paid rent, rates and electricity in respect of dairy, $8000, in cash Paid cheesemakers' wages, $3000 Paid wages for cleaning and hygiene, $600 Transferred all production of cheese in cartons to finished goods stock. No work in progress at end of month Required: Prepare a calculation of the cost of production transferred to finished goods at the end of May. (6 marks)