With reference to the information given under Para 4, show the statement of profit and loss and balance sheet extracts in respect of the grant…

(a) 8 (a) When grant is treated as deferred income Statement of profit and loss – An extract (₹) Depreciation (₹ 30,00,000 x 20%) 6,00,000 Government grant credit (W.N.1) 1,20,000 Balance Sheet - An extract (₹) (₹) Non-current assets Property, plant and equipment 30,00,000 Less: Accumulated depreciation (6,00,000) 24,00,000 ???? Non-current liabilities Government grant (4,80,000 - 1,20,000) 3,60,000 Current liabilities Government grant 1,20,000 ???? Working Note: Government grant deferred income account (₹) (₹) To Profit or loss (6,00,000 × 20%) 1,20,000 By Grant cash received 6,00,000 To Balance c/f 4,80,000 6,00,000 6,00,000 (b) When grant is deducted from cost of the asset Statement of profit and loss – An extract (₹) Depreciation {(₹ 30,00,000 -6,00,000) × 20%} 4,80,000 Balance Sheet - An extract (₹) (₹) Non-current assets Property, plant and equipment (30,00,000 - 6,00,000) 24,00,000 Less: Accumulated depreciation (4,80,000) 19,20,000