Prepare journal entries for the current year in connection with the grant. Problem 24-2 (IFRS)On January 1, 2021, Citimart Company was granted by a localgovernment authority 5,000 hectares of land located nearthe slums outside the city limits.The condition attached to this grant was that the entity shallclean up this land and lay roads by employing laborers fromthe village where the land is located.The government has fixed the minimum wage payable to theworkers.The entire operation will take 3 years and is estimated tocost P10,000,000.This amount will be spent P2,000,000 for 2021, P2,000,000for 2022, and P6,000,000 for 2023.The fair value of this land is P12,000,000.Required:Prepare journal entries for the current year in connection withthe grant.

Government Grants: Government grants or assistance are usually provided to enterprises in cash or…

Answered: On January 1, 2021, Citimart Company…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter3: Income Sources

Section: Chapter Questions

Problem 88P

See similar textbooks

Similar questions

On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 266,000 September 1, 2021 $ 345,000 December 31, 2021 $ 345,000 March 31, 2022 $ 345,000 September 30, 2022 $ 266,000 Kendall borrowed $670,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $3,850,000 in 8% bonds payable outstanding in 2021 and 2022.What was the interest (using the specific interest method) capitalized for 2022?
On January 1, 2018 The Village of Port Jefferson engaged to Frog Construction company to construct amunicipal office complex. The three-year a to receive 10 million in cash payments from the city in threeinstallments: 25% when the project was 30% complete; 25% when the project was 60% complete; and50%when the project was fully complete. The contract required that Frog's completion estimates be certifiedby an independent consultant before payments were made.During the first year of the contract, Frog completed 30% of the contract and incurred costs of 2,490,000.During the second year, the project was certified as being 60% complete and Frog incurred costs of3,100,000.During the third year, Frog completed the project and incurred costs of 3,110,000.Assuming Frog had no other revenues or expenses, determine the profit on construction for 2018, 2019,and 2020 under the following methods: A. Percentage Calculation B. Completed Contract
On November 1, 2021, Jonas Company established an agency in Laguna sending its merchandise samples costing P31, 500 and a working fund of P18, 000 to be maintained on the imprest basis. During the month, the agency transmitted to the home office sales orders which were billed at P128, 760 of which 50% was collected. A home office disbursement chargeable to the agency is the procurement of office furniture costing P50, 000 which is to be depreciated at 24% per year. The agency paid expenses of P7, 630 and received replenishment from the home office. On November 30, 2021, the agency samples were valued at P20, 150. The gross profit on goods shipped averages 33 1/3% of cost. How much is the net income of the agency for the month of November 2021? a. 25, 752 b, None of the above c. 6, 772 d. 12, 210 e. 5, 772
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 320,000 September 1, 2021 $ 390,000 December 31, 2021 $ 390,000 March 31, 2022 $ 390,000 September 30, 2022 $ 320,000 Kendall borrowed $780,000 on a construction loan at 9% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,650,000 in 12% bonds payable outstanding in 2021 and 2022. Interest (using the specific interest method) capitalized for 2022 was:A. $126,315. B. $108,495. C. $109,565. D. $52,650.
As of Jan. 1, 2020, ABC Corporation is constructing a new facility located in a community that has little livelihood sources. The entity received the land from the government on the condition that it hires 90% of its workers from the community throughout a 5-year period. The land is valued at P10,000,000. The construction of the building was partially financed by the entity and also the government. Information regarding the facility construction, government grant and funding sources can be seen in the attached image. By the end of 2020, construction is substantially completed. Date Amount Spent Jan. 1,2020 P 4,000,000 March 31,2020 5,000,000 June 30, 2020 8,000,000 Borrowing Interest Rate Principal Amount Specific Borrowing-Government 8% P 2,000,000 Genaral Borrowing A 9% 12,000,000 Genral Borrowing B 10% 4,000,000 All borrowings were outstanding throughout the year. Interest payments are due every Jan.1 1. How much is the capitalizable borrowing cost?…
Present in good form On January 1, 20x6, BUNNY, a real estate company, entered into a contract to construct a subdivision on a piece of land it has acquired and, when construction is complete, to deliver the finished houses to their customers. The following information pertains to the said contract each customer is to sign. Each house costs P4,000,000 each (a total of 10 houses are to be constructed), Construction will take 2 years to complete. Payment terms are 50% by the end of the 1" year, 25% at the end of the 2 year and the balance will be paid after 3 months from the final turn-over. The client can transfer the contract to another, should they not feel satisfied with the house on or before the house is 50% complete. The company incurred the following expenses for 20x6,Total cost of land ~ P2M; Estimated total cost of construction ~ P25M, (including the costs for the common areas, streets and light posts amounting to P5M); Estimated total cost of contract for the 10 houses ~ P40M;…
On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system was finished and ready for use on September 30, 2022. Expenditures on the project were as follows: January 1, 2021 $ 235,000 September 1, 2021 $ 342,000 December 31, 2021 $ 342,000 March 31, 2022 $ 342,000 September 30, 2022 $ 235,000 Kendall borrowed $764,000 on a construction loan at 7% interest on January 1, 2021. This loan was outstanding throughout the construction period. The company had $4,570,000 in 7% bonds payable outstanding in 2021 and 2022.Average accumulated expenditures for 2021 was: Multiple Choice $349,000. $399,000. $577,000. $470,000.
On january 2 2021 brand company received a grant of P60,000,000 to compensate it for costs it incurred i planting trees over a period of five years. Brand company will incur such cost in this manner: 2021 2,000,000 2022 4,000,000 2023 6,000,000 2024 8,000,000 2025 10,000,000 actual costs incurred in the planting trees showed 2,000,000 and 4,000,000 in years 2021 and 2022, respectively. However in 2023 and 2024 the company has stopped planting trees. Due to the non fulfillment of its obligation, the government is demanding an immediate repayment of the grant in the amount of 50,000,000 which is considered reasonable. What is the grant income for the year 2021?
K During 2021, Ming's Book Store paid $486,000 for land and built a store in Naperville, Illinois. Prior to construction, the city of Naperville charged Ming's $1,000 for a building permit, which Ming's paid. Ming's also paid $15,000 for architect's fees. The construction cost of $670,000 was financed by a long-term note payable, with interest costs of $28,020 paid at the completion of the project. The building was completed June 30, 2021. Ming's depreciates the building using the straight-line method over 35 years, with estimated residual value of $330,000. Read the requirements. c. Joumalize depreciation on the building for 2021. Journal Entry Date Accounts Depreciation Expense-Building Accumulated Depreciation Building Balance Sheet Plant assets: Debit Less: 5,486 Credit 5,486 Requirement 2. Report Ming's plant assets on the company's balance sheet at December 31, 2021. *** Check answer ot MO ot MO ot MO ot MO
On January 2, 2020, Bonita Industries began construction of a new citrus processing plant. The automated plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 $ 609000 September 1, 2020 1802400 December 31, 2020 1802400 March 31, 2021 1802400 September 30, 2021 1203000 Bonita Industries borrowed $3400000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. The company also had $13320000 in 9% bonds outstanding in 2020 and 2021.The interest capitalized for 2020 was: A)$505656 B)$108882 C)$145176 D)$289368
On January 2, 2020, IRG Company began the construction of a small processing plant. The plant was finished and ready for use on September 30, 2021. Expenditures for the construction were as follows: January 2, 2020 P 200,000 September 1, 2020 600,000 December 31, 2020 600,000 March 31, 2021 600,000 September 30, 2021 400,000 IRG borrowed P 1,100,000 on a construction loan at 12% interest on January 2, 2020. This loan was outstanding during the construction period. a. What were the weighted-average accumulated expenditures for 2020? b. The interest capitalized for 2020 is ___________. c. What were the weighted-average accumulated expenditures for 2021 by the end of the construction period? d. The interest capitalized for 2021 is _____________ e. Interest expense for the year 2020 is ___________

SEE MORE QUESTIONS

Recommended textbooks for you

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

CONCEPTS IN FED.TAX., 2020-W/ACCESS

Accounting

ISBN:

9780357110362

Author:

Murphy

Publisher:

CENGAGE L

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS