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21) On January 1. 2021, Nola Company received a grant of P50 million from a foreign government for the construction of a laboratory and research facility with an estimated cost of P60 million and useful life of 25 years. The facility was completed in early 2022. Company policy is to treat the grant as a deduction from the cost of the asset. What should be the depreciation expense in respect of this facility for the year ended December 31, 2022, assuming the depreciation is calculated on a straight line basis? A. Nil B. 2,400,000 C. 2.000,000 D. 400,000

21) On January 1. 2021, Nola Company received a grant of P50 million from a foreign government for the construction of a laboratory and research facility with an estimated cost of P60 million and useful life of 25 years. The facility was completed in early 2022. Company policy is to treat the grant as a deduction from the cost of the asset. What should be the depreciation expense in respect of this facility for the year ended December 31, 2022, assuming the depreciation is calculated on a straight line basis? A. Nil B. 2,400,000 C. 2.000,000 D. 400,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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21) On January 1, 2021, Nola Company received a grant of P50 million from a foreign government for the construction of a laboratory and research facility with an estimated cost of P60 million and useful life of 25 years. The facility was completed in early 2022. Company policy is to treat the grant as a deduction from the cost of the asset. What should be the depreciation expense in respect of this facility for the year ended December 31, 2022, assuming the depreciation is calculated on a straight line basis? A. Nil B. 2,400,000 C. 2,000,000 D. 400,000
Transcribed Image Text:21) On January 1, 2021, Nola Company received a grant of P50 million from a foreign government for the construction of a laboratory and research facility with an estimated cost of P60 million and useful life of 25 years. The facility was completed in early 2022. Company policy is to treat the grant as a deduction from the cost of the asset. What should be the depreciation expense in respect of this facility for the year ended December 31, 2022, assuming the depreciation is calculated on a straight line basis? A. Nil B. 2,400,000 C. 2,000,000 D. 400,000
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