Use the Following Information for Questions

question 124

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 amount of depreciation expense recorded in 2011 will be:

• A)HK$0.
• B)HK$200,000.
• C)HK$300,000.
• D)$HK500,000.

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Definitions:

Infomercials

Long-form television commercials that are designed to educate and persuade viewers about a product or service, typically lasting longer than a traditional commercial.

Viral Advertising

A marketing strategy that relies on social networks and word-of-mouth to increase brand awareness rapidly.

Premium

Amount paid by the insured to the insurer to exchange for insurance coverage.

Institutional Advertisement

Promotional activities aimed at building a company's image and establishing long-term brand awareness rather than promoting a specific product.