Bar Limited is a company that farms corn. Bar Limited is a relatively new company in the
Question:
Bar Limited is a company that farms corn. Bar Limited is a relatively new company in the corn industry, having previously been in the furniture manufacturing industry. Bar Limited was awarded a government grant of R 500 000 on 1 January 2015, the details of which are as follows:
a) R 300 000 is to assist with the purchase of new harvester;
b) R 200 000 is for immediate financial support and is not associated with any future costs;
c) All conditions attaching to the grant have been met.
Later that day, the harvester was acquired for R 900 000. The harvester has a useful life of years and, at the end of its useful life, Bar Limited expects to sell it for R 50 000 as scrap metal.
Required
Show the general journal entries for the years ended 31 December 2015 to 2019 using the direct method (recognized as grant income)
Cost Accounting A Managerial Emphasis
ISBN: 978-0133138443
7th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham