Use the Following Information for Questions

question 102

Multiple Choice

Use the following information for questions.
Lee Company received an HK$1,800,000 subsidy from the government to purchase manufacturing equipment on January, 2, 2011.The equipment has a cost of HK$3,000,000, a useful life a six years, and no salvage value.Lee depreciates the equipment on a straight-line basis.
-If Lee chooses to account for the grant as an adjustment to the asset, the book value of the asset on the 2012 statement of financial position will be:

• A)HK$800,000.
• B)HK$1,200,000.
• C)HK$2,800,000.
• D)$HK2,400,000.

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Definitions:

Strategic Approaches

Methods or plans of action designed to achieve a long-term or overall aim in various contexts including business, negotiation, or conflict resolution.

Tangible Factors

Physical or material aspects that can be observed and measured in a decision-making process.

Intangible Factors

Elements that cannot be seen or touched but still significantly affect outcomes, such as reputation or brand value.

Negotiation

is the process of discussing and coming to mutual agreements between parties with differing interests.