Problem 2 On July 1, 2015, DreamDad Inc., which has a calendar year accounting period, received a government grant of P 2 million, six months into the financial year, to subsidize the cost of building a new training center for its employees and to develop a new training scheme. When DreamDad applied for the grant, it estimated that P 1,500,000 would be applied to the building and the remainder for the development of the scheme. The training center is estimated to cost P5 million to build and will have a 20-year life. The HR Department has started to write the training program, which was completed at the end of this financial year. Required: Prepare entries to give effect to the above transactions. Fill out the amounts of below journal entries. Year 1: Cash Deferred government grant income Government grant income Deferred government grant income Government grant income Following years: Deferred government grant income Government grant income
Problem 2 On July 1, 2015, DreamDad Inc., which has a calendar year accounting period, received a government grant of P 2 million, six months into the financial year, to subsidize the cost of building a new training center for its employees and to develop a new training scheme. When DreamDad applied for the grant, it estimated that P 1,500,000 would be applied to the building and the remainder for the development of the scheme. The training center is estimated to cost P5 million to build and will have a 20-year life. The HR Department has started to write the training program, which was completed at the end of this financial year. Required: Prepare entries to give effect to the above transactions. Fill out the amounts of below journal entries. Year 1: Cash Deferred government grant income Government grant income Deferred government grant income Government grant income Following years: Deferred government grant income Government grant income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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