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What is the book value of the asset on December

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Reference no: EM132613023

Question - Lee Company received an P1,800,000 subsidy from the government to purchase manufacturing equipment on January 2, 2020. The equipment has a cost of P3,000,000, a useful life a six years, and no salvage value. Lee depreciates the equipment on a straight-line basis.

Required - Under each of the following independent cases:

1. What is the book value of the asset on December 31, 2020?

2. What is the depreciation expense for the asset in 2020?

3. Prepare journal entries in 2020

Case 1 If Lee chooses to account for the grant as deferred revenue.

Case 2 If Lee chooses to account for the grant as an adjustment to the asset.

Reference no: EM132613023

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