Subject is Financial reporting (Answer is require on immegiate basis)

Q.No.6: General Fan Company (GFC) acquired an item of machinery with an amount of Rs.2 million. The company also incurred modification expenditure of Rs. 200,000 and carriage and erection cost of Rs.100,000. The machinery has a useful life of 10 years with no scrap value. The company was able to acquire a government grant of 50% against its purchase price but the grant could not be received by June 30, 2019.The accounting policy of the company is to treat the government grant as deferred credit and transfer a part of the grant to income every year. (Marks 06)

Required:

Prepare extracts of General Fan Companys financial statements for the year ended June 30,2019 for the machinery and the associated grant as per IAS-20 Accounting for Government Grants and Disclosure of Government Assistance