Santa Maria College, Inc. a proprietary educational institution, spent P 20,000,000 for the construction of a new school building. The estimated useful life of the building is 50 years. The 20,000,000 spent by the proprietary educational institution, choose the best answer: Od. Capitalized and expensed outright at the option of the Bureau of Internal Revenue. Oc Capitalized or expensed outright at the option of Santa Maria College, Inc. O a. Must be claimed as expense in the year of completion. O b. Capitalize and claim annual depreciation over the 50 years.

Santa Maria College, Inc. a proprietary educational institution, spent P 20,000,000 for the construction of a new school building. The estimated useful life of the building is 50 years. The 20,000,000 spent by the proprietary educational institution, choose the best answer: Od. Capitalized and expensed outright at the option of the Bureau of Internal Revenue. Oc Capitalized or expensed outright at the option of Santa Maria College, Inc. O a. Must be claimed as expense in the year of completion. O b. Capitalize and claim annual depreciation over the 50 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 1, 20x1, Entity A received land with fair of ₱200,000 from the government conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 20x1 for a total cost of ₱1,000,000. The building has an estimated useful life of 10 years and zero residual value. 1.How much is the income from government grant in 20x1 and 20x2, respectively? 2.How much is the carrying amount of the building on December 31, 20x2 under the following presentations?3.How much is the depreciation expense recognized in 20x3 under the following presentations?
Topic: Government Grants Entity A received land with fair value of P 200,000 from the government conditioned with the construction of a building on the lot. Entity A started immediately the construction and it was completed on Dec. 31, 2021 for a total cost of P 1,000,000. The building has an estimated useful life of 10 years with no residual value. How much is income from the government grant in 2021 and 2022? a. P 0 and P 200,000, respectively b. P 0 and P 20,000, respectively c. P 200,000 and P 0, respectively d. P 20,000 and P 20,000, respectively
On January 1, 20x1, Entity A received land with fair of ₱200,000 from the government conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 20x1 for a total cost of ₱1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the income from government grant in 20x1 and 20x2, respectively? 20x1 20x2 0 200,000 200,000 0 0 20,000 20,000 20,000 How much is the carrying amount of the building on December 31, 20x2 under the following presentations? Gross presentation Net presentation 1,000,000 800,000 900,000 720,000 800,000 640,000 800,000 533,333 How much is the depreciation expense recognized in 20x3 under the following presentations? Gross presentation Net presentation 100,000 80,000…
The president of ACCO 202 Corporation donated a building to Ana G. Méndez Corporation. The building had an original cost of $200,000, a book value of $75,000, and a fair market value of $180,000. To record this donation, Ana G. Méndez would a. Make a memorandum entry b. Debit Building for $75,000 and credit Gain for $75,000 c. Debit Building for $200,000 and credit Gain for $200,000 d. Debit Building for $180,000 and credit Gain for $180,000
Group Activity 2. On January 1, 2021, Entity A received land with fair of $200,000 from the government conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 2021 for a total cost of $1,000,000. The building has an estimated useful life of 10 years and zero residual value. a. How much is the income from government grant in 2021 and 2022, respectively? b. How much is the carrying amount of the building on December 31, 2022 under the gross presentation and net presentation? c. How much is the depreciation expense recognized in 2023 under the gross presentation and net presentation?
Choose the letter of the correct answer At the beginning of the current year, an entity purchased an equipment for P 4,000,000 and received government grant of P 500,00 with respect to this asset. The equipment is depreciated on a straight-line basis over 5 years. The residual value of the equipment is P 200,000. The entity use deduction from asset approach. What would be the journal entry to recognize the grant income for the year? a. Debit to Deferred grant income P 660,000 and Credit to Grant income P 660,000b. Debit to Deferred grant income P 760,000 and Credit to Grant income P 760,000c. Debit to Deferred grant income P 100,000 and Credit to Grant income P 100,000d. None
7. Karen Company purchased a varnishing machine for P3,000,000 on January 1, 2019. The entity received a government grant of P500,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. How much deferred income from the government grant will be presented in the statement of financial position for 2019?
Problem 4. On January 1, 20x1, ABC CO received land with a fair of ₱200,000 from the government conditioned on the construction of a building on the lot. Entity A started the construction immediately and it was completed on December 31, 20x1 for a total cost of ₱1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the income from government grant in 20x1 and 20x2, respectively? How much is the carrying amount of the building on December 31, 20x2 under the gross and net presentations? How much is the depreciation expense recognized in 20x3 under the gross and net presentations?
On January 1, 2021, Entity A received land with fair of PHP 200,000 from the govemment conditioned on the construction of a building on the lot. Entity A started immediately the construction and it was completed on December 31, 2021 for a total cost of PHP 1,000,000. The building has an estimated useful life of 10 years and zero residual value. How much is the income from the government grant in 2021 and 2022 respectively? 2021 2022 a. 0 b. 200,000 200,000 c. 0 d. 20,000 20,000 20,000
At the beginning of the current year, Peace Company purchased a machine for P 7,000,000 and received a government grant of P 1,000,000 toward the capital cost. The machine is to be depreciated on a straight line basis over 5 years and estimated to have a residual value of P 500,000 at the end of this period 1. The journal entry to record the government grant as a deferred revenue: 2. The journal entry to recognize income from government grant:
Rigg Owusu Enterprises Ltd bought a machine for GH₵ 150,000 on 1st January 2019. It depreciates the machine on cost over four years assuming a nil residual value. The company received a grant of GH₵30,000 from the municipal assembly to support the acquisition of the machines. Account for this grant under the netting off method.
The president of Christmas Corporation donated a building to Tuesday Corporation. The building had an original cost of $675,000, a book value of $255,000, and a fair market value of $475,000. The journal entry by Tuesday Corporation to record this donation will include a debit Building for $255,000 and credit Gain for $255,000. debit Building for $675,000 and credit Gain for $200,000. debit Building for $475,000 and credit Gain for $200,000. debit Building for $475,000 and credit Gain for $475,000.