ABC Inc. was granted a parcel of land by a local government authority. The condition attached to this grant was that ABC Inc. should clean up this land and lay roads by employing laborers from the village in which the land is located. The entire operation will take three years and is estimated to cost ₱100 million. This amount will be spent in this way: ₱20 million each in the first and second years and ₱60 million in the third year. The fair value of this land is currently ₱120 million. How much should be recognized as income from government grant at the end of the first year?
ABC Inc. was granted a parcel of land by a local government authority. The condition attached to this grant was that ABC Inc. should clean up this land and lay roads by employing laborers from the village in which the land is located. The entire operation will take three years and is estimated to cost ₱100 million. This amount will be spent in this way: ₱20 million each in the first and second years and ₱60 million in the third year. The fair value of this land is currently ₱120 million. How much should be recognized as income from government grant at the end of the first year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ABC Inc. was granted a parcel of land by a local government authority. The condition attached to this grant was that ABC Inc. should clean up this land and lay roads by employing laborers from the village in which the land is located. The entire operation will take three years and is estimated to cost ₱100 million. This amount will be spent in this way: ₱20 million each in the first and second years and ₱60 million in the third year. The fair value of this land is currently ₱120 million. How much should be recognized as income from government grant at the end of the first year?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education