ABC Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P 81,000 in respect of this asset. It is the policy of the entity to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. 1) What should be the carrying amount of the machine as of December 31, 2021? P 409,500 P 675,000 P 450,000 P 490,500 2) What is the deferred income balance at December 31, 2021? P 60,750 P 81,000 P 0 P 40,500 3) What is the realized income from government grants in 2022?? P 81,000 P 40,500 P 60,750 P 20,250
ABC Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P 81,000 in respect of this asset. It is the policy of the entity to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. 1) What should be the carrying amount of the machine as of December 31, 2021? P 409,500 P 675,000 P 450,000 P 490,500 2) What is the deferred income balance at December 31, 2021? P 60,750 P 81,000 P 0 P 40,500 3) What is the realized income from government grants in 2022?? P 81,000 P 40,500 P 60,750 P 20,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Company acquired a rice milling machine to be used by farmers for P 900,000 on January 1, 2020. The company received a government grant of P 81,000 in respect of this asset. It is the policy of the entity to
1) What should be the carrying amount of the machine as of December 31, 2021?
P 409,500
P 675,000
P 450,000
P 490,500
2) What is the deferred income balance at December 31, 2021?
P 60,750
P 81,000
P 0
P 40,500
3) What is the realized income from government grants in 2022??
P 81,000
P 40,500
P 60,750
P 20,250
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