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    Chapter 16 Problem Solving

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    WeStan Legends
    The document contains journal entries recording the receipt and use of government grants for environmental projects over multiple years. It also includes calculations of depreciation amounts for equipment purchased with the grants. Key details include: - Grants of $30M, $40M, and $50M were received in the first three years and deferred as income. As expenses were incurred, portions of the grants were recognized as income. - Land, buildings, and factories were acquired with the cash from grants and depreciation was recorded against accumulated depreciation accounts. - Later problems show the calculation of depreciation amounts on equipment based on cost, residual value, and depreciation periods.

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    Chapter 16 Problem Solving

    Uploaded by

    WeStan Legends
    49 views3 pages
    The document contains journal entries recording the receipt and use of government grants for environmental projects over multiple years. It also includes calculations of depreciation amounts for equipment purchased with the grants. Key details include: - Grants of $30M, $40M, and $50M were received in the first three years and deferred as income. As expenses were incurred, portions of the grants were recognized as income. - Land, buildings, and factories were acquired with the cash from grants and depreciation was recorded against accumulated depreciation accounts. - Later problems show the calculation of depreciation amounts on equipment based on cost, residual value, and depreciation periods.

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    The document contains journal entries recording the receipt and use of government grants for environmental projects over multiple years. It also includes calculations of depreciation amounts for equipment purchased with the grants. Key details include: - Grants of $30M, $40M, and $50M were received in the first three years and deferred as income. As expenses were incurred, portions of the grants were recognized as income. - Land, buildings, and factories were acquired with the cash from grants and depreciation was recorded against accumulated depreciation accounts. - Later problems show the calculation of depreciation amounts on equipment based on cost, residual value, and depreciation periods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    49 views3 pages

    Chapter 16 Problem Solving

    Uploaded by

    WeStan Legends
    The document contains journal entries recording the receipt and use of government grants for environmental projects over multiple years. It also includes calculations of depreciation amounts for equipment purchased with the grants. Key details include: - Grants of $30M, $40M, and $50M were received in the first three years and deferred as income. As expenses were incurred, portions of the grants were recognized as income. - Land, buildings, and factories were acquired with the cash from grants and depreciation was recorded against accumulated depreciation accounts. - Later problems show the calculation of depreciation amounts on equipment based on cost, residual value, and depreciation periods.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    Chapter 16 Problem Solving

    Problem 16-1
    Journal entries for the first year to record independent government grant:

    1.

    Cash 30,000,000
    Deferred grant income 30,000,000

    Deferred grant income 3,000,000


    Grant income 3,000,000

    Environmental expenses 2,000,000


    Cash 2,000,000

    2.

    Cash 40,000,000
    Deferred grant income 40,000,000

    Building 50,000,000
    Cash 50,000,000

    Depreciation expense 2,500,000


    Accumulated depreciation 2,500,000

    Deferred grant income 2,000,000


    Grant income 2,000,000

    3.

    Land 50,000,000
    Deferred grant income 50,000,000

    Factory 80,000,000
    Cash 80,000,000

    Depreciation Expense 3,200,000


    Accumulated depreciation 3,200,000

    Deferred grant income 2,000,000


    Grant income 2,000,000
    4.
    Cash 10,000,000
    Grant income 10,000,000

    Problem 16-5
    Journal Entries for the current year

    a. Deferred income

    Equipment 5,400,000
    Cash 5,400,000

    Cash 400,000
    Deferred income 400,000

    Depreciation Expense 1,040,000


    Accumulated depreciation 1,040,000

    Cost of equipment 5,400,000


    Residual value ( 200,000)
    Depreciable Amount 5,200,000

    First year depreciation (5,200,000 x 20%) 1,040,000

    Deferred grant income 40,000


    Grant income 40,000
    (400,000/10 years)

    b. Deduction from asset

    Equipment 5,400,000
    Cash 5,400,000

    Cash 400,000
    Deferred income 400,000

    Depreciation expense 960,000


    Accumulated depreciation 960,000

    Cost of equipment 5,400,000


    Government grant (400,000)
    Net cost 5,000,000
    Net cost 5,000,000
    Residual value (200,000)
    Depreciable amount 4,800,000

    First year depreciation (4,800,000 x 20%) 960,000

    Problem 16-6

    2
    First year (2020) (60,000,000 x ) d. 4,000,000
    30

    Problem 16-9

    1.

    Annual depreciation (3,000,000/ 4 years) 750,000

    Cost of equipment 3,000,000


    Depreciation (750,000)
    2020 carrying amount b. 2,250,000

    2.

    First year (2020) (500,000/ 4 years) b. 125,000

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