Solution-What amount should be reported as deferred grant

What amount should be reported as deferred grant income

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Reference no: EM132839605

Government Grant

Paula company purchased a varnishing machine for P6,000,000 on January 1, 2015. The entity received a government grant of P540,000 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.

Problem 1. What is the carrying amount of the machine on December 31, 2016?

a. 3,000,000

b. 4,500,000

c. 3,270,000

d. 2,730,000

Problem 2. What amount should be reported as deferred grant income on December 31,2016?

a. 540,000

b. 270,000

c. 405,000

d. 135,000

Reference no: EM132839605

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What amount should be reported as deferred grant income

Reference no: EM132839605

Reference no: EM132839605

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