This topic is about government grants. Please choose the correct letter of answer. Thank you!
Extracted text: Problem 16-6 (IFRS) On January 1, 2020, Humble Company received a government grant of P60,000,000 to compensate for costs to be incurred in planting trees over a period of 5 years. The entity will incur such costs at P2,000,000 for 2020. P4,000,000 for 2021, P6,000,000 for 2022, P8,000,000 for 2023, and P10,000,000 for 2024. What amount of income from the government grant is recognized for 2020? 12,000,000 b. a. 10,000,000 6,000,000 4,000,000 с. t bann a d.
Extracted text: On January 1, 2020, Pharoah Company purchased a varnishing machine for P6,000,000. The entity received a government grant of P540,000 in respect of this asset. The accounting policy is to depreciate the asset over 4 years on a straight line basis and to treat the grant as deferred income. What amount should be reported as deferred income on December 31, 2021? a. 270,000 b. 405,000 c. 135,000 d. 540,000