What is the depreciation

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Question - Patriotic Company purchased a machine for P8,500,000 on January 1, 2020 and received a government grant of P1,000,000 toward the asset cost. The accounting policy is to treat the grantas a reduction in the cost of the asset. The machine is to be depreciated on a straight-line basis over 5 years with a residual value of P500,000. On January 1, 2022, the grant became fully repayable because of noncompliance with conditions.

Required -

1. What is the depreciation for 2020?

A. 1,700,000

B. 1,600,000

C. 1,500,000

D. 1,400,000

2. What is the depreciation for 2022?

A. 1,400,000

B. 1,800,000

C. 1,600,000

D. 2,000,000

Reference no: EM133076344

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