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    Cranston LTD received a $2 million government grant in October 2018 to help fund the purchase of $10 million of equipment to improve local roads. The grant represents 20% of the total cost. Cranston recorded the grant as revenue and the equipment purchase by debiting equipment for $10 million and crediting cash for $10 million, without considering the grant as a reduction of the equipment's cost.

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    Solutiondone 74

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    trilocksp Singh
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    Cranston LTD received a $2 million government grant in October 2018 to help fund the purchase of $10 million of equipment to improve local roads. The grant represents 20% of the total cost. Cranston recorded the grant as revenue and the equipment purchase by debiting equipment for $10 million and crediting cash for $10 million, without considering the grant as a reduction of the equipment's cost.

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    Cranston LTD received a $2 million government grant in October 2018 to help fund the purchase of $10 million of equipment to improve local roads. The grant represents 20% of the total cost. Cranston recorded the grant as revenue and the equipment purchase by debiting equipment for $10 million and crediting cash for $10 million, without considering the grant as a reduction of the equipment's cost.

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    6 views1 page

    Solutiondone 74

    Uploaded by

    trilocksp Singh
    Cranston LTD received a $2 million government grant in October 2018 to help fund the purchase of $10 million of equipment to improve local roads. The grant represents 20% of the total cost. Cranston recorded the grant as revenue and the equipment purchase by debiting equipment for $10 million and crediting cash for $10 million, without considering the grant as a reduction of the equipment's cost.

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    Cranston LTD prepares its financial statements according

    to International Financial
    Cranston LTD prepares its financial statements according to International Financial

    Cranston LTD. prepares its financial statements according to International Financial


    Reporting Standards. In October 2018, the company received a $2 million government grant.
    The grant represents 20% of the total cost of equipment that will be used to improve the roads
    in the local area. Cranston recorded the grant and the purchase of the equipment as follows:
    Cash.................................. 2,000,000
    Revenue......................... 2,000,000
    Equipment........................ 10,000,000
    Cash............................... 10,000,000
    Required:
    1. Explain the alternative accounting treatments available to Cranston for accounting for this
    government grant.
    2. Prepare any necessary correcting entries under each of the alternatives described in
    requirement 1.

    Cranston LTD prepares its financial statements according to International Financial


    SOLUTION-- http://solutiondone.online/downloads/cranston-ltd-prepares-its-financial-
    statements-according-to-international-financial/

    Unlock answers here solutiondone.online

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