State the reasons for the difference?
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State the reasons for the difference?
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- Dumb Company constructed its own factory building. The company had a P1,000,000 two-year 12% loan specifically obtained to finance the asset construction. The construction began on January 1, 2021 and the building was completed on December 30, 2022. Expenditures on the building were made as follows: January 1, 2021 P800,000April 30, 2021 300,000November 1, 2021 600,000March 1, 2022 600,000September 30, 2022 400,000Dumb has the following outstanding loans from general borrowings: 10% note issued prior to construction of new building; term, 10 years 1,500,000 12% note issued prior to construction of new building; term, 15 years 2,500,000 13) How much is total initial cost of the building? 14) How much is the finance cost that should be recognized in profit or loss for the year 2022?On January 1, 2022, Annibelle Company received a grant of P9,000,000 from the foreign government in order to defray safety and environmental costs within the area where the entity is located. The safety and environmental costs are expected to be incurred over three years, respectively, P1,000,000, P2,000,000 and P3,000,000. What income from the government grant should be recognized in 2022? A. 9,000,000 В. 1,500,000 С. 3,000,000 D. 4,500,000A company is analyzing the acquisition of a concession. The government provides it for 6 years for an initial investment of $50,000,000 and the export equipment will cost another $50,000,000 (which is acquired in the initial period of the project), with the commitment that in year 8 it will reforest for $250,000,000. The annual income (from year 1 to 6) is $50,000,000. The IOT (Internal rate of opportunity) is 20% per year. The IRR (A.I.R.), which is greater than 10%, of this project, is:
- Trecek Corporation incurs research and development costs of $612,000 in 2020, 30 percent of which relate to development activities subsequent to IAS 36 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2021 and is expected to generate sales revenue for 10 years. Assume that Trecek Corporation is a U.S.-based company that is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes. Required: Prepare journal entries for research and development costs for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS. Prepare the entry(ies) that Trecek would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert U.S. GAAP balances to IFRS.On January 1, 2015, MERKS Company received a grant of P25,000,000 form the American government in order to defray safety and environmental costs within the area where the entity is located. The safety and environmental costs are expected to be incurred over four year, respectively, P4,000,000, P2,000,000, P8,000,000 and P6,000,000. What amount should be recognized in 2015? * a. 25,000,000 b. 2,500,000 c. 5,000,000 d.7,500,000The following data concern an investment project (Ignore income taxes.): Investment in equipment Annual net cash inflows $ 215,000 $ 56,000 $ 70,700 $ 27,000 Salvage value of the equipment Working capital required Life of the project Required rate of return 5 years Net present value 12% The working capital will be released for use elsewhere at the conclusion of the project. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: Compute the project's net present value. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.
- On January 1, 2020, Sapphire Mining Company purchased land with valuable natural ore deposits for P20 million. At that time, the estimated recoverable output from the mine is 4 million metric tons of ore after which the land is expected to a residual value of P3 million. To facilitate the extraction and transportation of the ore, roads were constructed amounting to P1.5 million.In 2020, two million metric tons were mined. At the end of 2021, a new estimate of remaining recoverable ore indicated 2.5 million metric tons are available. During 2021, 1.5 million metric tons were mined. How much is the depletion expense for 2020 and 2021, respectively?On June 1, 2023, a company began construction of a new manufacturing plant. The plant was completed on October 31, 2024. Expenditures on the project were as follows ($ in millions): July 1, 2023 88 October 1, 2023 56 February 1, 2024 64 April 1, 2024 38 September 1, 2024 37 October 1, 2024 23 On July 1, 2023, the company obtained a $104 million construction loan with a 8% interest rate. The loan was outstanding through the end of October, 2024. The company's only other interest - bearing debt was a long-term note for $100 million with an interest rate of 10%. This note was outstanding during all of 2023 and 2024. The company's fiscal year end is December 31. What is the amount of interest that should be capitalized in 2023, using the specific interest method? Multiple Choice $4.59 million S 4.64 million $5.65 million None of the other answer choices are correctTransaction ESurgimed Ghana Ltd. received a government grant of GH¢300,000 for acquiring plant and machinery costing GH¢1,500,000 during 2017 financial year and having a useful life of 10 years. The grant received was credited to deferred income in the statement of financial position as a result of adopting the deferred income approach of accounting for government grant. During the 2020 financial year, the company had to refund the grant to the government due to non-compliance of the conditions laid down for the grant. RequiredExplain to directors of Surgimed Ghana Ltd. what should be the appropriate treatment of the refund of the grant. Explain the effect on the cost of the plant and machinery, and the amount of depreciation thatshould be charged during the 2020 financial year financial statements.
- Flint Corp. erected and placed into service an offshore oil platform on January 1, 2023, at a cost of $10 million. Flint is legally required to dismantle and remove the platform at the end of its eight-year useful life. Flint estimates that it will cost $1.0 million to dismantle and remove the platform at the end of its useful life and that the discount rate to use should be 10%. Using (a) factor Table A.2, (b) a financial calculator, or (c) Excel function PV, prepare the entry to record the asset retirement obligation. Assume that none of the $1.0 million cost relates to production. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Click here to view the factor table. Click here to view the factor…InterCell Company wants to participate in the upcoming World's Fair in Korea. To participate, the firm needs to spend $1.5 million in year 0 to develop a showcase. The showcase will produce a cash flow of $3.75 million at the end of year 1. Then at the end of year 2, $2.31 million must be expended to restore the land on which the showcase was presented to its original condition. Therefore, the project's expected net cash flows are as follows (in thousands of dollars): N Cash flow0 -$1,SOO1 $3,7502 -$2,310(a) Plot the present worth of this investment as a function of i.(b) Compute the i*s for this investment. Is this a pure investment?( c) Would you accept this investment at MARR= 14 % ?On 1 April 2016, Gidimadjor Ltd received a government grant of GH¢8 million towards the purchase of new plant with a gross cost of GH¢64 million. The plant has an estimated life of 10 years and is depreciated on a straight-line basis.One of the terms of the grant is that the sale of the plant before 31 March 2020 would trigger a repayment on a sliding scale as follows:Sale in the year ended: Amount of repayment31 March 2017 100%31 March 2018 75%31 March 2019 50%31 March 2020 25%Accordingly, the directors propose to credit to the statement of profit or loss GH¢2 million (GH¢8 million x 25%) being the amount of the grant they believe has been earned in the year to 31 March 2017.Gidimadjor Ltd accounts for government grants as a separate item of deferred credit in its statement of financial position. Gidimadjor Ltd has no intention of selling the plant before the end of its economic life.Required:Advise, and quantify where possible, how the above items should be treated in Gidimadjor…