Top Limited operates in a poor area. During 2004, it installs a special pollution control device at a cost of $6,000 and receives a $4,000 grant from a local government. The depreciation is charged at 10% using straight line method. During 2006, the government finds out that Top Limited has not complied with the terms of the grant and asks it to repay the grant.

Required:

Show Relevant accounting treatment and Prepare Balance sheet and Statement of Profit or Loss extracts for the years ended 2004-2006 if Top Limited uses :

(i) Separate deferred grant method

(ii) Reduction form cost of asset method