On January 1, 2011, Sagada Company received a grant of P25,000,000 from the American government in order to defray safety and environmental costs within the area where the entity is located. The safety and environmental costs are expected to be incurred over four years, respectively, P4,000,000, P3,000,000,
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Q: Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery…
A: Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery…
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- On January 1, 2015, MERKS Company received a grant of P25,000,000 form the American government in order to defray safety and environmental costs within the area where the entity is located. The safety and environmental costs are expected to be incurred over four year, respectively, P4,000,000, P2,000,000, P8,000,000 and P6,000,000. What amount should be recognized in 2015? * a. 25,000,000 b. 2,500,000 c. 5,000,000 d.7,500,000On January 1, 2021, Annibelle Company received a grant of P9,000,000 from the foreign government in order to defray safety and environmental costs within the area where the entity is located. The safety and environmental costs are expected to be incurred over three years, respectively, P1,000,000, P2,000,000 and P3,000,000. What income from the government grant should be recognized in 2021?Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery costing GH¢1,500,000 during 2017 financial year and having a useful life of 10 years. The grant received was credited to deferred income in the statement of financial position as a result of adopting the deferred income approach of accounting for government grant. During the 2020 financial year, the company had to refund the grant to the government due to non-compliance of the conditions laid down for the grant. Required: (i) Explain to directors of Surgimed Ghana Ltd. what should be the appropriate treatment of the refund of the grant. (ii) Explain the effect on the cost of the plant and machinery, and the amount of depreciation that should be charged during the 2020 financial year financial statements.
- Surgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery costing GH¢1,500,000 during 2017 financial year and having a useful life of 10 years. The grant received was credited to deferred income in the statement of financial position as a result of adopting the deferred income approach of accounting for government grant. During the 2020 financial year, the company had to refund the grant to the government due to non-compliance of the conditions laid down for the grant. Required Explain to directors of Surgimed Ghana Ltd. what should be the appropriate treatment of the refund of the grant. Explain the effect on the cost of the plant and machinery, and the amount of depreciation that should be charged during the 2020 financial year financial statements.On January 1, 2019, Munich Co. received a grant of P10,000,000 from the government of USA for the construction of a building that will be used as a laboratory and research facility with an estimated cost of P15,000,000 and useful life of 10 years. The facility was completed on January 1, 2020. How much is the balance of deferred income from government grant on December 31, 2020 under the gross method (deferred income approach)?Cranston LTD. prepares its financial statements according to International Financial Reporting Standards. InOctober 2018, the company received a $2 million government grant. The grant represents 20% of the total cost ofequipment that will be used to improve the roads in the local area. Cranston recorded the grant and the purchaseof the equipment as follows:Cash ................................. 2,000,000Revenue....................... 2,000,000Equipment....................... 10,000,000Cash ............................. 10,000,000Required:1. Explain the alternative accounting treatments available to Cranston for accounting for this government grant.2. Prepare any necessary correcting entries under each of the alternatives described in requirement 1.
- On January 1, 2014, Valiant Company received a Government grant of P60,000,000 to compensate for the cost to be incurred in planting trees over a period of 5 years. Valiant Company will incur such cost at P2,000,000 for 2014, P4,000,000 for 2015, P6,000,000 for 2016, P8,000,000 for 2017, and P10,000,000 for 2018. What amount of income from the government grant is recognized for 2015?b) ABC Company obtained a grant of GHe 10 million from a government agency for an investment project to construct a manufacturing plant of at least GH488 million. The principal term is that the grant payments relate to the level of capital expenditure. The secondary intention is to safeguard 300 jobs. The grant will have to be repaid pro-rata if there is underspending on capital. Twenty percent of the grant will have to be repaid if the jobs are not safeguarded within 18 months after the date of the last asset purchase. The plant was completed on 1 January 2008 at a total cost of GH490 million. The plant had an expected useful life of 20 years and is depreciated on a straight-line basis with nil residual value. ABC Company adopts the policy of setting government grants up as deferred income. Required: Show the relevant Statement of Profit or Loss and Statement of financial position extracts as well as the relevant disclosures in the 2008 final accounts.Transaction ESurgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery costing GH¢1,500,000 during 2017 financial year and having a useful life of 10 years. The grant received was credited to deferred income in the statement of financial position as a result of adopting the deferred income approach of accounting for government grant. During the 2020 financial year, the company had to refund the grant to the government due to non-compliance of the conditions laid down for the grant. RequiredExplain to directors of Surgimed Ghana Ltd. what should be the appropriate treatment of the refund of the grant. Explain the effect on the cost of the plant and machinery, and the amount of depreciation thatshould be charged during the 2020 financial year financial statements.
- In January, 2022, Harmony Inc. has the following expenditures related to manufacturing a new generation of its product. Match each expenditure to the appropriate accounting treatment on the right. Takes possession of a manufacturing machine. The vendor sends an invoice for $650,000. Pays a machine import duty of $35,000 to the government. Pays employees $75,000 for research and development to finalize the new product design. Receives an invoice for $4,250 from the company that shipped the machine. Pays employees $16,500 to install, customize, and test the new manufacturing machine. Pays…Sandstorm Corporation decides to develop a new line of paints. The project begins in 2023 in the U.S. Sandstorm incurs the following expenses in 2023 in connection with the project: Salaries $90,000 Materials 27,000 Depreciation on equipment 13,500 The benefits from the project will be realized starting in July 2024. If an amount is zero, enter "0". Sandstorm Corporation capitalizes and amortizes its research and experimental expenditures. What are its related deductions in 2023 and 2024?2023: $fill in the blank 12024: $fill in the blank 2On January 1, 2017, Humble company received a government grant of 60,000,000 to compensate for costs to be incurred in planting trees over a period of 5 years. The entity will incur such costs at 2,000,000 for 2017, 4,000,000 for 2018, 6,000,000 for 2019, 8,000,000 for 2020, and 10,000,000 for 2021. What amount of income from the government grant is recognized for 2017?