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 life of the building is 5 years with no residual value. On January 1, 2021, the entire amount of the goverńment grant became repayable by reason of noncompliance with conditions attached to the grant. Required: Prepare journal entries assuming the government grant is accounted for using: 1. Deferred income approach 2. Deduction from asset approach

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 life of the building is 5 years with no residual value. On January 1, 2021, the entire amount of the goverńment grant became repayable by reason of noncompliance with conditions attached to the grant. Required: Prepare 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

See similar textbooks

Similar questions

Domestic
Fill the blanks XYZ company purchased a new machine on July 1, 2021, at a cost of €50,000. The company estimated that the machine will have a residual value of €10,000. The machine is expected to be used for 10,000 working hours during its 5‐year life. After 6 months, it has been used for 2500 hours and company decides to sell it for 55000. No depreciation has been recorded for the machine. If the company used double declining balance method instead of units-of-activity, the net book value would have been ...blank... and the ...blank... on disposal would have been ...blank...
15
nku.3
5
b
4. On January 1, Mitzu Company pays a lump-sum amount of $2,600,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $793,000, with a useful life of 20 years and a $70,000 salvage value. Land Improvements 1 is valued at $305,000 and is expected to last another 10 years with no salvage value. The land is valued at $1,952,000. The company also incurs the following additional costs. Cost to demolish Building 1 $ 348,400 Cost of additional land grading 187,400 Cost to construct Building 3, having a useful life of 25 years and a $400,000 salvage value 2,202,000 Cost of new Land Improvements 2, having a 20-year useful life and no salvage value 178,000 Required:1. Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
15. On January 1, 2022, a company leased a land and building from an unrelated lessor for a 10- year term. The lease had a renewal option for an additional 5 years, but the entity has not reached a decision with regard to the renewal option. In early 2020, the entity completed three improvements to the property: Improvement 1 P 940,000 Improvement 2 1,500,000 360,000 Improvement 3 10 years 8 years 12 years What amount of depreciation of leasehold improvements will be reported in 2022? a. P199,228 b. P280,000 c. P311,500 d. P317,500