Natalie Company purchased a machine for P6,600,000 on January 1, 2022 and received a government grant of P600,000 towards the capital cost. The policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over ten years with a residual value of P500,000. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What is the depreciation for 2022? A. 610,000 B. 600,000 C. 660,000 D. 550,000 2. What is the depreciation for 2024? A. 610,000 B. 600,000 C. 780,000 D. 730,000

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Natalie Company purchased a machine for P6,600,000 on January 1, 2022 and received a government grant of
P600,000 towards the capital cost. The policy is to treat the grant as a reduction in the cost of the asset. The machine
is to be depreciated on a straight line basis over ten years with a residual value of P500,000. On January 1, 2024, the
grant became fully repayable because of noncompliance with conditions.
1. What is the depreciation for 2022?
A. 610,000
B. 600,000
C. 660,000
D. 550,000
2. What is the depreciation for 2024?
A. 610,000
B. 600,000
C. 780,000
D. 730,000
Transcribed Image Text:Natalie Company purchased a machine for P6,600,000 on January 1, 2022 and received a government grant of P600,000 towards the capital cost. The policy is to treat the grant as a reduction in the cost of the asset. The machine is to be depreciated on a straight line basis over ten years with a residual value of P500,000. On January 1, 2024, the grant became fully repayable because of noncompliance with conditions. 1. What is the depreciation for 2022? A. 610,000 B. 600,000 C. 660,000 D. 550,000 2. What is the depreciation for 2024? A. 610,000 B. 600,000 C. 780,000 D. 730,000
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