Quell Company purchased a varnishing machine for P3,000,000 on January 1, 2020. The entity received a government grant of P500,000 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. 1. What is the carrying amount of the asset on December 31, 2020? a. 3,000,000 b. 2,250,000 c. 2,500,000 d. 1,875,000 2. What amount of income from the government grant is recognized for 2020? 500,000 b. 125,000 a. 250,000 d. с. 0.

Quell Company purchased a varnishing machine for P3,000,000 on January 1, 2020. The entity received a government grant of P500,000 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. 1. What is the carrying amount of the asset on December 31, 2020? a. 3,000,000 b. 2,250,000 c. 2,500,000 d. 1,875,000 2. What amount of income from the government grant is recognized for 2020? 500,000 b. 125,000 a. 250,000 d. с. 0.

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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