Sandestino Company contributes cash of $170,000 and Costa Grande Company contributes net assets of $170,000 to create Grand Sand Company on January 1, Year 1. Sandestino and Costa Grande each receive a 50 percent equity interest in Grand Sand. Grand Sand's financial statements for its first year of operations are as follows:

Before making any accounting entries related to its investment in Grand Sand Company, Sandestino Company's financial statements for the year ended December 31, Year 1, are as follows:

Required
Restate Sandestino€™s Year 1 financial statements to properly account for its investment in Grand Sand Company under IFRS.

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GRAND SAND COMPANY Income Statement Year 1 Revenues Expe Income before tax lax expense Net income $80,000 50.000 30,000 10,000 $20,000 GRAND SAND COMPANY Balance Sheet December 31, Year 1 S 40,000 Liabilities Inventory Property, plant, and equipment (net).. 320.000 Retained eamings .. Total S 60,000 .. 340,000 20000 $420.000 60,000 Common stoc $420,000 Total SANDESTINO COMPANY Income Statement Year l Revenues Expenses Income before tax Tax expense Net income $800,000 450.000 350,000 100.000 $250.000 SANDESTINO COMPANY Balance Sheet December 31, Year 1 130,000 Liabilities.. 200,000 Common stock 250,000 600,000 Cash Inventory Property, plant, and equipment (net) 650,000 Retained eamings 300,000 Investment in Grand Sand (at cost) 170,000 Total 1,150,000 Tota. $1,150,000