The grant income to be recognized in the second year should be?
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A: The correct answer is Option (3).
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- Example 2 Kaokodi Ltd received a grant of GHC60 million to compensate it for costs it incurred in planting trees over a period of five years. Kaokodi Ltd will incur such costs in this manner: Year Costs GHC'000 1 2,000 2 4,000 6,000 4 8,000 10,000 Total costs thus incurred will aggregate to GHC30 million, whereas the grant received is GHC60 million. Reguired: Based on the provisions of IAS 20, how would Kaokodi Ltd treat the "grant" in its books? Example 3 Nyansapo Ltd received a grant of GHC150 million to install and run a solar energy system in an economically backward area. Nyansapo Ltd has estimated that such a system would cost GHC250 million to construct. The secondary condition attached to the grant is that the entity should hire labour in the local market (i.e., from the economically backward area where the windmill is located) instead of emploving workers from other parts of the country. It should maintain a ratio of 1:1 local worker to workers from outside in its labor force…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?3 The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2024, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Debits Credits Accounts payable $ 108,000 Accounts receivable $ 27,400 Accrued interest payable 30,600 Accumulated depreciation 49,000 Administrative and selling expenses 51,000 Allowance for uncollectible accounts 13,000 Capital assets 714,000 Cash 96,800 Charges for sales and services 561,000 Cost of sales and services 500,000 Depreciation expense 49,000 Due from General Fund 17,300 Interest expense 40,500 Interest revenue 5,300 Transfer in from General Fund 117,600 Bank note payable 630,400 Supplies inventory 18,900 Totals $ 1,514,900 $ 1,514,900 Required: Prepare the reconciliation of operating income to net cash provided by operating activities that would appear at…
- ABC begins the construction of a building on 1 January 20X1. The following expenditures on this property incurred during the year 20X1: (Unit: CU 1000)1 January 20X1 – 100,0001 June 20X1 – 300,0001 October 20X1 – 600,000On 1 January 20X1, Entity A had 500,000 of general borrowings which increased by 1 million to 1.5 million in total on 1 June 20X1. Interest expense on these borrowings calculated to 50,000 for full-year 20X1.Calculate the amount relating to borrowing cost that should be capitalized in the cost of the building?Problem 5: Comparing the measurement focus and basis of accounting of governmental funds with the measurement focus and basis of accounting of proprietary funds The information below pertains to the Village of Brexitville for the year ended December 31, 2022. Purchased 10 HP printers at the beginning of 2022 for $11,000; the printers are expected to last 4 years and have a salvage value of $1,000; Paid $42,000 to the federal government representing the Village’s share of payroll taxes for FICA and Medicare; Paid $50,000 to retire bonds payable; paid interest on outstanding bonds of $1,000; Received a bill for $2,000 on January 2, 2023, from Peoples Gas for natural gas used to heat government facilities in November and December, 2022. Required: Compute total expenditures for the local government assuming transactions A, B, and D are recorded in the general fund, and transaction C is recorded in a debt service fund. Compute total expenses for the government assuming all transactions…13 The City of Brown Creek constructed a new storage facility using the city's own public works employees. Construction costs were incurred in the amount of $900,000, plus $25,000 in interest on short-term notes used to finance construction. What amount should be capitalized in the government-wide statements? Multiple Choice O $900,000. $925,000. $875,000. $0.
- 2 The Village of Seaside Pines prepared the following enterprise fund Trial Balance as of December 31, 2024, the last day of its fiscal year. The enterprise fund was established this year through a transfer from the General Fund. Debits Credits Accounts payable $ 108,000 Accounts receivable $ 27,400 Accrued interest payable 30,600 Accumulated depreciation 49,000 Administrative and selling expenses 51,000 Allowance for uncollectible accounts 13,000 Capital assets 714,000 Cash 96,800 Charges for sales and services 561,000 Cost of sales and services 500,000 Depreciation expense 49,000 Due from General Fund 17,300 Interest expense 40,500 Interest revenue 5,300 Transfer in from General Fund 117,600 Bank note payable 630,400 Supplies inventory 18,900 Totals $ 1,514,900 $ 1,514,900 Required: Prepare the closing entries for December 31. Prepare the Statement of Revenues, Expenses, and Changes in Fund…takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=D&inprogress3false Calculator Prepare the journal entry for the following transaction. Apr. 15 Last year, Titan Corporation's board of directors appropriated $150,000 for the purchase of a new storage facility over a three- year period. This year's appropriation for $50,000 was made on this date. If an amount box does not require an entry, leave it blank. Page: 1 POST. DATE DESCRIPTION DEBIT CREDIT REF. 1 Apr. 15 2.10. An entity had the following loans outstanding during 20X1 and 20X2.Specific construction loan, 2,000,000 - 15%General loan, 15,000,000 - 12%The entity began the self-construction of a new building on January 1, 20X1 and the building was completed on December 31, 20X2. The following expenditures were made during 20X1 and 20X2: January 1, 20X1 - 2,000,000; July 1, 20X1 - 4,000,000; November 1, 20X1 - 3,000,000; July 1, 20X2 - 1,000,000. What is the cost of the building?
- 17. Ebasan Company received a grant of P60,000,000 to compensate it for costs it incurred in planting trees over a period of 5 years. Ebasan will incur costs as follows: 2021 2022 P2,000,000 4,000,000 2023 6,000,000 2024 8,000,000 2025 10,000,000 Based on the provisions of PAS 20, how much should be recognized as income from government grant at the end of 2021? A. 60,000,000 B. 12,000,000 C. 2,000,000 D. 4,000,0005A. A non-government agency is funding annual seminar on campus by using earnings of a $100,000 gift. It is estimated that 12% interest rate will be realized in the first 10 years, but only 6% may be anticipated after that. What uniform annual payment may be established from the beginning to fund the seminar at the same level into infinity? An additional gift of $10000 was received in the agency at the end of 5 years, A i. ii. which they have deposited in the seminar account. What will be the new annual payment starting from 6th year to infinity? (HUM 3051) Page 2 o IIMC Qu. 16-84 Donata Company purchased equipment for... Donata Company purchased equipment for $45,000 in December 20x1. The equipment is expected to generate $12,000 per year of additional revenue and incur $6,000 per year of additional cash expenses, beginning in 20x2. Under MACRS, depreciation in 20x2 will be $7,000. If the firm's income tax rate is 20%, the after-tax cash flow in 20x2 would be: Multiple Choice O O о $1,200. $2,200. $3,600. $6.200. None of the answers is correct.
