On 1st January 2019, ABC received $3m from the local government on the condition that they employ at least 100 staff each year for the next 2 years. On this date, it was virtually certain that ABC would meet these requirements. However, due to an economic downturn and reduced consumer demand, after one year, ABC no longer needed to employ anymore staff and the conditions of the grant required full repayment. 

Required:

a) Pass Journal Entries for both years. 

b) Prepare Extracts of Financial Statements for 2nd year. 

Answer rating: 100% (QA)

Answer in million in million Year 1 Right to Recei... View the full answer