Note:-Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure. Surat Limited paid cash to acquire an aircraft on January 1, 2020, at a cost of 31,500,000 rupees. The aircraft has an estimated usefullife of 50 years and no salvage value. The company has determined that the aircraft is composed of three significant components withthe following original costs (in rupees) and estimated useful lives:ComponentFuselageEnginesInteriorCost11,100,00015,300,0005,100,00031,500,000Useful Life50 years40 years30 yearsThe U.S. parent of Surat does not depreciate assets on a component basis, but instead depreciates assets over their estimated usefullife as a whole.Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S.GAAP to prepare consolidated financial statements. Ignore income taxes.Required:a. Prepare journal entries for this aircraft for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S.GAAP.b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheetsto convert IFRS balances to U.S. GAAP.

Depreciation is the reduction in the value of asset due tonormal wear and tearEffluxion of…

Answered: Surat Limited paid cash

Business

Accounting

Surat Limited paid cash

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Note:-

Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
You will get up vote for sure.

Surat Limited paid cash to acquire an aircraft on January 1, 2020, at a cost of 31,500,000 rupees. The aircraft has an estimated useful
life of 50 years and no salvage value. The company has determined that the aircraft is composed of three significant components with
the following original costs (in rupees) and estimated useful lives:
Component
Fuselage
Engines
Interior
Cost
11,100,000
15,300,000
5,100,000
31,500,000
Useful Life
50 years
40 years
30 years
The U.S. parent of Surat does not depreciate assets on a component basis, but instead depreciates assets over their estimated useful
life as a whole.
Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S.
GAAP to prepare consolidated financial statements. Ignore income taxes.
Required:
a. Prepare journal entries for this aircraft for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S.
GAAP.
b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets
to convert IFRS balances to U.S. GAAP.

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