What would be the grant revenue recognized

Assignment Help Accounting Basics
Reference no: EM132544388

Question - ABC Company received an $1,800,000 subsidy from the government to purchase manufacturing equipment on January, 2, 2018. The equipment has a cost of $3,000,000, a useful life a six years, and no salvage value. ABC depreciates the equipment on a straight-line basis.

Instruction -

a) If ABC chooses to account for the grant as deferred revenue, calculate and show what would be the grant revenue recognized in 2018, depreciation expense in 2018, deferred grant revenue at the end of 2018 and the equipment's book value at the end of 2018.

b) If ABC chooses to account for the grant as an adjustment to the asset, calculate and show what would be the grant revenue recognized in 2018, depreciation expense in 2018 and the equipment's book value at the end of 2018.

Reference no: EM132544388

Questions Cloud

Present ABC Corporation partial income statements : Present ABC Corporation's partial income statements starting with "income from continuing operations." and present net income
What interest rate would the investment have to yield : What interest rate would the investment have to yield in order for Stanley's brother to deliver on his promise?
Find how much money do need to set aside each month : If you were to invest the money in a bond fund at 6% interest? How much money do need to set aside each month for amount to be available in 15 years?
Calculate retention ratio and growth rate : Malta Corporation has posted earnings of Rs.18/share and has paid cash dividend of Rs.12. Calculate Retention Ratio and Growth rate if ROE is 15%.
What would be the grant revenue recognized : If ABC chooses to account for the grant as deferred revenue, calculate and show what would be the grant revenue recognized in 2018
What is valid for the net present estimation of the venture : Your association is thinking about running,What is valid for the net present estimation of the venture over the three years cycle at a rebate rate of 10%?
Calculate and present the amount of interest cost : The office was completed and ready for occupancy on July 1. Calculate and present the amount of interest cost to be capitalized during 2019
What differences among expectations and market segmentation : What are the differences among the expectations, market segmentation, and liquidity premium theories for the term structure of interest rates?
What is the bond price : 1. A 7 year bond with par value 1000 Rupees has a current yield 8.5 percent and a coupon rate of 9 percent. What is the bond's price?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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