Ôn January 1, 2020, Pharoah Company purchased a varnishing machine for P6,000,000. The entity received a government grant of P540,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount should be reported as deferred income on December 31, 2021? a. 270,000 b. 405,000 c. 135,000 d. 540.000

Ôn January 1, 2020, Pharoah Company purchased a varnishing machine for P6,000,000. The entity received a government grant of P540,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount should be reported as deferred income on December 31, 2021? a. 270,000 b. 405,000 c. 135,000 d. 540.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

What is the general rule for recognizing property taxes as revenues? How would property taxes be accounted for differently in the fund statements, as opposed to the government-wide statements?
Which of the following funds of a government uses the same basis of accounting as a proprietary fund? Multiple Choice Permanent fund. Special revenue fund. Capital projects fund. Investment trust fund.
How does the topic of accounting for government grants relate to the topic of accounting for biological assets?
Topic Please research an annual comprehensive financial report of any local municipality of your choice that had a general government capital construction project that was financed. Discuss the project and type of financing that the local government used, and opine on the other various financing options that the government could have used. In your opinion, did the local government use the most effective financing option? Why or why not? Note: Please provide a link to the referenced material used. This can be attached as a website link or a document (PDF/Word). Make sure to reference your source (using APA 7th edition).
Please describe and illustrate the kinds of restrictions that doners may impose on the use of resources they contribute to nonprofits.
Discuss the purpose of the capital projects fund, debt service fund, and permanent fund. Describe the difference between government-wide financial statements and fund-basis financial statements. Why is it necessary for the federal government accounting standards to differ from state and local governments accounting standards?
Which of the following organizations or units would least likely be accounted for by an enterprise fund? Multiple Choice A motor pool. A golf course. A sports stadium. An airport.
Which of the following statements is correct? Multiple Choice A contribution receivable should be recognized as an asset when the amount can be reasonably estimated AND the ultimate collection is reasonably assured. A contribution receivable should be recognized as an asset when the amount can be reasonably estimated OR the ultimate collection is reasonably assured. Bequests are accrued at the time the donor advises the NFPO of the gift. Government funding is recognized as contribution revenue as long as the government is the direct recipient of the good or service. Group Ends
please answer fast What are the three categories of contributions based on donor intent?
Construction of a municipal courthouse would typically be accounted for using a: Group of answer choices a.) Capital projects fund b.) Permanent fund c.) General fund
List some of the major adjustments required when converting from fund financial statements to governmentwide statements. Why are these adjustments necessary?
On what should the governmental fund financial statements report? Multiple Choice Cost of government services. Net position and results of financial operations of the government as a whole. Fiscal accountability. Operational accountability.