Problem 24-1
Date Particulars Debit Credit
1 Cash 15,000,000
Deferred grant income 15,000,000
Government grant as deferred income
Environmental expenses 2,000,000
Cash 2,000,000
Acquisition of equipment
Deferred grant income (2/20 x 15,000,000) 1,500,000
Grant income 1,500,000
Income from government grant
2 Cash 10,000,000
Deferred grant income 10,000,000
Government grant as deferred income
Building 15,000,000
Cash 15,000,000
Acquisition of building
Depreciation (15,000,000/6) 2,500,000
Accumulated depreciation 2,500,000
Annual depreciation
Deferred grant income (10,000,000/6) 1,666,667
Grant income 1,666,667
Income from government grant
3 Land 5,000,000
Deferred grant income 5,000,000
Building 8,000,000
Cash 8,000,000
Depreciation (8,000,000/5) 1,600,000
Accumulated depreciation 1,600,000
Deferred grant income (5,000,000/5) 1,000,000
Grant income 1,000,000
4 Cash 6,000,000
Grant income 6,000,000
Income from government grant
Problem 24-2
Date Particulars Debit Credit
2023
Jan. 1 Land 12,000,000
Deferred grant income 12,000,000
Land improvement 2,000,000
Cash 2,000,000
Deferred grant income (2/10 x 12,000,000) 2,400,000
Grant income 2,400,000
Problem 24-3
Date Particulars Debit Credit
2023
Jan. 1 Cash 12,000,000
Deferred grant income 12,000,000
Building (12,000,000 x 3/4) 9,000,000
Cash 9,000,000
Tuition cost (12,000,000 x 1/4) 3,000,000
Cash 3,000,000
Dec. 31 Depreciation (9,000,000/10) 900,000
Accumulated depreciation 900,000
Tuition expense (3,000,000/4) 750,000
Cash 750,000
Deferred grant income (900,000 + 750,000) 1,650,000
Grant income 1,650,000
Problem 24-4
Deferred income approach
Date Particulars Debit Credit
2023
Jan. 1 Machinery 8,000,000
Cash 8,000,000
Cash 2,000,000
Deferred grant income 2,000,000
Depreciation 750,000
Accumulated depreciation 750,000
Supporting computation:
Cost 8,000,000
Less: Residual value 500,000
Depreciable amount 7,500,000
Depreciation (7,500,000/10) 750,000
Deferred grant income (2,000,000/10) 200,000
Grant income 200,000
Deduction from asset approach
Date Particulars Debit Credit
2023
Jan. 1 Machinery 8,000,000
Cash 8,000,000
Cash 2,000,000
Machinery 2,000,000
Depreciation 550,000
Accumulated depreciation 550,000
Supporting computation:
Cost 8,000,000
Less: Government grant 2,000,000
Net cost 6,000,000
Less: Residual value 500,000
Depreciable amount 5,500,000
Annual Depreciation (5,500,000/10) 550,000
Problem 24-5
Deferred income approach
Date Particulars Debit Credit
2023
Jan. 1 Machinery 5,400,000
Cash 5,400,000
Cash 400,000
Deferred grant income 400,000
Dec. 31 Depreciation (5,400,000 x 20%) 1,080,000
Accumulated depreciation 1,080,000
Deferred income (400,000 x 20%) 80,000
Grant income 80,000
Deduction from asset approach
Date Particulars Debit Credit
2023
Jan. 1 Machinery 5,400,000
Cash 5,400,000
Cash 400,000
Machinery 400,000
Dec. 31 Deferred income (5,000,000 x 20%) 1,000,000
Grant income 1,000,000
Supporting computation:
Cost 5,400,000
Less: Government grant 400,000
Net cost 5,000,000
