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I am doing some revision and is bit lost with working over PPE especially relating to the Government Grants. Can you Assist.
When the grant was received, the company debited cash and credited PPE
This should have been credited to deferred income and to the expense item to which the grant related ie wages and salaries in two equal parts
To correct the inappropriate treatment the correcting entry needs to take it out of the PPE credit, so debit PPE and credit the appropriate elements to the deferred income account and the related expense item of wages and salaries
Does that help?
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