Use the Following Information for Questions

question 133

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 deferred revenue, the grant revenue recognized will be:

• A)Zero in the first year of the grant's life.
• B)HK$300,000 per year for the years 2011-2016.
• C)HK$500,000 per year for the years 2011-2016.
• D)$HK1,800,000 in 2011.

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Definitions:

Activity Measure

An allocation base in an activity-based costing system; ideally, a measure of the amount of activity that drives the costs in an activity cost pool.

Patient-visits

A measure used in healthcare to quantify the number of visits or interactions patients have with healthcare providers.

Customers Served

The number or segment of clients who receive services or purchase products from a business within a given time frame.

Revenue

The total amount of money received by a company for goods sold or services provided during a specific period.