Company W acquired a wastewater treatment plant for 30,000, depreciable over 10 years. The company also received a capital government grant. The government grant received within the framework of an environmental regulation covers one-third of the amount. The CEO considers the two accounting treatments for capital grants (i.e., netting off method and deferred income method). What would be the difference in the depreciation expense between those two methods at the end of year 1. Note: Company W uses a straight-line depreciation allocation. O a. £3,000 O b. £2,000 O C. £0 O d. £1,000
Company W acquired a wastewater treatment plant for 30,000, depreciable over 10 years. The company also received a capital government grant. The government grant received within the framework of an environmental regulation covers one-third of the amount. The CEO considers the two accounting treatments for capital grants (i.e., netting off method and deferred income method). What would be the difference in the depreciation expense between those two methods at the end of year 1. Note: Company W uses a straight-line depreciation allocation. O a. £3,000 O b. £2,000 O C. £0 O d. £1,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow ideas from gpt, but please do not believe its answer.Very very grateful!Please do not rely too much on chatgpt, because its answer may be wrong. Please consider it carefully and give your own answer. You can borrow
ideas from gpt, but please do not believe its answer.Very very grateful!
Transcribed Image Text:Company W acquired a wastewater treatment plant for 30,000, depreciable over 10 years. The
company also received a capital government grant. The government grant received within the
framework of an environmental regulation covers one-third of the amount.
The CEO considers the two accounting treatments for capital grants (i.e., netting off method and
deferred income method). What would be the difference in the depreciation expense between those
two methods at the end of year 1.
Note: Company W uses a straight-line depreciation allocation.
O a. £3,000
O b. £2,000
O C.
£0
O d. £1,000
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