The following information relates to government grants received and receivable by Jorgbenue Gee ple, who operates...

 

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The following information relates to government grants received and receivable by Jorgbenue Gee ple, who operates children recreation centre in Manchester UK. Employment grant This is grant of £3,000 towards employment costs incurred during 2007. The grant has not yet been received but the conditions for receipt have been met. Capital grant A grant of £60,000 was applied for in 2007 to help finance the acquisition of new game machines costing £200,000. The machinery was acquired on 31 March 2007 and is expected to last for ten years, after which it will have a residual value of £20,000. Straight line depreciation is to be charged from the date of acquisition. The grant was received on 30 September 2007. Requirement State how each of these grants should be accounted for in accordance with SSAP 4 Accounting treatment of government grants in the financial statements for the year ended 31 December 2007. The following information relates to government grants received and receivable by Jorgbenue Gee ple, who operates children recreation centre in Manchester UK. Employment grant This is grant of £3,000 towards employment costs incurred during 2007. The grant has not yet been received but the conditions for receipt have been met. Capital grant A grant of £60,000 was applied for in 2007 to help finance the acquisition of new game machines costing £200,000. The machinery was acquired on 31 March 2007 and is expected to last for ten years, after which it will have a residual value of £20,000. Straight line depreciation is to be charged from the date of acquisition. The grant was received on 30 September 2007. Requirement State how each of these grants should be accounted for in accordance with SSAP 4 Accounting treatment of government grants in the financial statements for the year ended 31 December 2007.

Answer rating: 100% (QA)

SS AP 4 Accounting treatment of government grants in the financial statements for the year ended 31 December 2007 requires that the employment grant b... View the full answer