Advise wisdom ltd on the treatment of the grant

Assignment Help Financial Accounting
Reference no: EM132613818

Wisdom Ltd

Wisdom Ltd received a Government grant of GHS150 million in January 2019 to install and run a solar energy system in an economically backward area. Wisdom Ltd has estimated that such a system would cost GHS250 million to construct. The secondary condition attached to the grant is that the entity should hire labour in the local market (i.e., from the economically backward area where the windmill is located) instead of employing workers from other parts of the country. It should maintain a ratio of 1:1 local workers to workers from outside in its labor force for the next 5 years. The windmill is to be depreciated using the straight-line method over a period of 10 years. The management of Wisdom has adopted the policy of treating unearned government grant on a deferral basis.

Required

Question 1: Advise Wisdom Ltd on the treatment of this grant in the 2019 financial statements ( Statement of Profit and Loss for 2019 and Statement of financial position as at 31 December 2019) in accordance with IAS 20.

Reference no: EM132613818

Questions Cloud

About providing quality guest service : Assume that you are a hotel manager who is very concerned about providing quality guest service.
How the asset will be accounted for in financial statements : How the asset will be accounted for in the 2015 financial statements ( Statement of Profit and Loss for 2019 and Statement of financial position)
Operations management and project management : Many universities, industry professionals, and organizations feel that operations management and project management go hand in hand.
Determine the annual interest costs : Genetech has $2,000,000 in assets, have decided to finance 30% with long-term financing (13% rate) and 70% with short-term financing
Advise wisdom ltd on the treatment of the grant : Advise Wisdom Ltd on the treatment of this grant in the 2019 financial statements ( Statement of Profit and Loss for 2019 andStatement of financial position)
Calculate the interest charges for the years : You plan to borrow $15,000 for a 10-year term, at 15% simple interest per annum. Calculate the interest charges for each of the years
Outcomes of organizations you know of or have worked : What are some of the structures, processes and outcomes of organizations you know of or have worked in? How are these areas successful or unsuccessful
Explain the treatment of the building in financial statement : Explain the treatment of the building in the 2019 financial statements on the assumption that the entity uses the fair value model for investment properties.
How many czech crowns : If a Czech crown is equal to $.04, the U.S. dollar is equal to how many Czech crowns?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Factors that influence the dividend policy

Critically evaluate the various factors that influence the dividend policy of both financial and non- financial firms. Support your answer with appropriate

  Describe the meaning of a financial reporting system

You were recently hired as management director of the new I Can Business Incorporated (ICBI). You have been asked to establish policies and systems.

  What the gross lease receivables account balance should be

How much is the interest revenue relating to the lease for the year ended December 31, 2015? What the gross lease receivables account balance should be

  Common shares authorized and issued

A company has 10 million common shares authorized and 2.5 million shares issued. The par value is $1 per share and the market price is $30 when the company declares a 4-for-1 stock split. Which of the following is correct?

  Compute the amount of cash to be reporte on eastwood company

Compute the amount of cash to be reported on Eastwood Co.'s balance sheet at December 31, 2014. Indicate the proper reporting for items that are not reported as cash on the December 31, 2014, balance sheet.

  Identify general business tax credit

Identify General Business tax credit and discuss its current treatment. Then, argue whether or not it should be allowed as a credit.

  How prepaid insurance represents a three-year premium paid

Piotroski Properties prepares monthly financial statements. Using the following information, adjust the accounts as necessary on January 31 using the financial statements effect template. (a) Prepaid insurance represents a three-year premium paid o..

  Find how much debt will be issued next year

If the firm grows at its sustainable growth rate, how much debt will be issued next year? (Do not round intermediate calculations.)

  Prepare an income statement at thirty first may

Prepare a trial balance at 31 May; Prepare an income statement at 31 May; Prepare a statement of financial position as at 31 May.

  What controls can cfo place to prevent them

Given the enormous responsibilities CFOs hold, they should have a good understanding of those deliberate frauds on the part of employees. Could you name some common types of frauds? What controls can CFO place to prevent them?

  Leaves money in retirement account to accumulate interest

Starting at age 25, Jim saves $1200 a year for 8 years then stops saving (leaves his money in the retirement account to accumulate interest). Starting at age 35, John saves $1200 a year for the next 30 years.

  What are the basic assumption behind the markowitz portfolio

What are the basic assumptions behind the Markowitz portfolio theory? Why Diversification Reduces or Eliminates Firm-Specific Risk?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd