Page 220 - F1 Integrated Workbook STUDENT 2018
P. 220
Chapter 13
Method 2: Treat grant as deferred income
Statement of profit or loss extract
$
Depreciation (below) (20,000)
Government grant credit (W1) 3,000
Statement of financial position extract
$
Non-current assets:
Plant & machinery 100,000
Accumulated depreciation (100,000 × 20%) (20,000)
–––––
80,000
–––––
Non-current liabilities
Government grant (12,000 (W1) – 3,000 (current liability)) 9,000
Current liabilities
Government grant (15,000 × 20%) 3,000
(W1) Government grant deferred income
Grant cash received Dr Bank $15,000
Cr Government Grant Deferred Income $15,000
Transfer to profit and loss Dr Government Grant Deferred Income $3,000
Cr Statement of Profit or Loss $3,000
Remaining balance on Government Grant Deferred Income = $15,000 –
$3,000 = $12,000
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