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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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