Tipla Chemicals Plc operates in a poor area. During 2004, it installs a special pollution control...
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Tipla Chemicals Plc operates in a poor area. During 2004, it installs a special pollution control device at a cost of $6,000,000 and receives a grant of $4,000,000 from the local government. During 2006, the government finds out that Tipla has not complied with the terms of the grant and asks it to repay the grant. After protracted negotiations, Tipla gives up and repays $4,000,000. It had deducted the grant from the carrying amount of the asset and charged depreciation at 10% under the straight line method for two years. Required: Show the accounting treatment of the refund. Tipla Chemicals Plc operates in a poor area. During 2004, it installs a special pollution control device at a cost of $6,000,000 and receives a grant of $4,000,000 from the local government. During 2006, the government finds out that Tipla has not complied with the terms of the grant and asks it to repay the grant. After protracted negotiations, Tipla gives up and repays $4,000,000. It had deducted the grant from the carrying amount of the asset and charged depreciation at 10% under the straight line method for two years. Required: Show the accounting treatment of the refund.
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Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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