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Surat Limited paid cash to acquire an aircraft on January 1,2020, at a cost of...

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Accounting

Surat Limited paid cash to acquire an aircraft on January 1,2020, at a cost of 32,730,000 rupees. The aircraft has an estimated useful
life of 40 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:
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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