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The overall cost of the machine is P1,200,370. Lorna Group has P900,000 in the bank. The useful life of the machine is estimated to be

The overall cost of the machine is P1,200,370. Lorna Group has P900,000 in the bank. The useful life of the machine is estimated to be 10 years and the policy is depreciated using diminishing balance at 10%.

If Lorna qualifies, how will they recognize the grant in their books over the 2 years of its useful life? (10 marks)

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