Preposterous Company received a government grant of P2,000,000 related to a factory building that it purchased in January 2020 from an industrialist identified by the government. If the entity did not purchase the building, which was löcated in the slums of the city, it would have been repossessed by the government agency. the entity purchased the building for P12,000,000. The useftl uie of the building is 5 years with no residual value. on January 1, 2021, the entire amount of the government grant became repayable by reason of noncompliance with conditions attached to the grant. Required: dopare journal entries assuming the government grant is accounted for using: 1. Deferred income approach 2. Deduction from asset approach
Preposterous Company received a government grant of P2,000,000 related to a factory building that it purchased in January 2020 from an industrialist identified by the government. If the entity did not purchase the building, which was löcated in the slums of the city, it would have been repossessed by the government agency. the entity purchased the building for P12,000,000. The useftl uie of the building is 5 years with no residual value. on January 1, 2021, the entire amount of the government grant became repayable by reason of noncompliance with conditions attached to the grant. Required: dopare journal entries assuming the government grant is accounted for using: 1. Deferred income approach 2. Deduction from asset approach
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
PROBLEM 24-8 (IFRS)
Transcribed Image Text:conditions attached to the grant.
1. Deferred income approach
Prepare
for 2020, 2021 and 2022.
Problem 24-8 (IFRS)
Preposterous Company received a government grant of
P2,000,000 related to a factory building that it purchased in
January 2020 from an industrialist identified by the
government.
If the entity did not purchase the building, which was Tocated
in the slums of the city, it would have been repossessed by
the government agency.
The entity purchased the building for P12,000,000. The useftul
ute of the building is 5 years with no residual value.
ol January 1, 2021, the entire amount of the goverńment
Required:
accounted for using:
685
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