Ayayai Corporation, a clothing retailer, had income from operations (before tax) of $450,000, and recorded the following before-tax gains/(losses) for the year ended December 31, 2020: Gain on disposal of equipment Unrealized (loss) gain on FV-Nl investments (Loss)/gain on disposal of building Gain on disposal of FV-NI investments 32,400 (64,800) (81,600) 39,600 Ayayai also had the following account balances as at January 1, 2020: Retained earnings Accumulated other comprehensive income (this was due to a revaluation surplus on land) Accumulated other comprehensive income (this was due to gains on FV-OCl investments) $492,000 117,200 66,000 As at January 1, 2020, Ayayai had one piece of land that had an original cost of $142,000 that it accounted for using the revaluation model. It was most recently revalued to fair value on December 31, 2019, when its carrying amount was adjusted to fair value of $259,200. In January 2020, the piece of land was sold for proceeds of $259,200. In applying the revaluation model, Ayayai maintains the balance in the Revaluation Surplus (OCI) account until the asset is retired or disposed of. In 2015, Ayayai purchased a portfolio of debt investments that the company intended to hold for longer term and classified the portfolio of investments as fair value through other comprehensive income (FV-OCI) with gains/losses recycled through net income. The investments in the portfolio are traded in an active market. Ayayai records unrealized gains and losses on these investments as OCI, and then books these gains and losses to net income when they are impaired or sold. The portfolio's carrying amount on December 31, 2019, was $132,000. The entire portfolio was sold in November 2020 for proceeds of $151,200. Ayayai's income tax expense for 2020 was $118,800. Ayayai prepares financial statements in accordance with IFRS. Partial Statement of Income For the year Ended December 31, 2020 Income from Operations $ $450,000 Other Revenues and Gains Gain on disposal of Equipment $$32,400 117,200 66,000 215,600 465,600 Other Expenses and Losses V Loss on Disposal of Building (81,600) Unrealized Loss on FV-NI Investments (25,200) (106,600) Income before Income Tax 460,000 Income Tax Expense (118,800) i Net Income /(Loss) $ 342,000 Your answer is correct. Calculate retained earnings as at December 31, 2020. Ayayai Corporation Statement of Retained Earnings For the year Ended December 31, 2020 Beginning balance, January 1 $ 492,000 Add VI: Net Income / (Loss) 342,000 Ending balance, December 31 $ 834,000 e Textbook and Media Calculate net income for the year ended December 31, 2020, if Ayayai prepares financial statements in accordance with ASPE. Ayayai's income tax expense would not change. Ayayai Corporation Partial Statement of Income For the year Ended December 31, 2020 Beginning balance, January 1 $ 450,000 Other Revenues and Gains $ Your answer is partially correct. Calculate retained earnings as at December 31, 2020, if Ayayai prepares financial statements in accordance with ASPE. Assume that under ASPE, Ayayai's retained earnings at January 1, 2020, would be $558,000. Ayayai Corporation Statement of Retained Earnings For the year Ended December 31, 2020 Beginning balance, January 1 $ 558,000 Add Net Income / (Loss) Ending balance, December 31 $ e Textbook and Media Your answer is partially correct. Will the sum of the Accumulated Other Comprehensive Income and Retained Earnings under IFRS equal the balance of Retained Earnings under ASPE at December 31, 2020? Prepare a continuity schedule of the related accounts to demonstrate your answer. The sum of the AOCI and Retained Earnings under IFRS equal the balance of Retained Earnings under ASPE as follows: IFRS AOCI Retained Earnings Balance Jan. 1, 2020 $ $ Transfer of accumulated revaluation surplus on land Unrealized gain FV-OCI debt investments during 2020 i Net income 342,000 Realized gain recycled to net income i Balance Dec. 31, 2020 $ $ 1,036,400 e Textbook and Media Ayayai Corporation, a clothing retailer, had income from operations (before tax) of $450,000, and recorded the following before-tax gains/(losses) for the year ended December 31, 2020: Gain on disposal of equipment Unrealized (loss) gain on FV-Nl investments (Loss)/gain on disposal of building Gain on disposal of FV-NI investments 32,400 (64,800) (81,600) 39,600 Ayayai also had the following account balances as at January 1, 2020: Retained earnings Accumulated other comprehensive income (this was due to a revaluation surplus on land) Accumulated other comprehensive income (this was due to gains on FV-OCl investments) $492,000 117,200 66,000 As at January 1, 2020, Ayayai had one piece of land that had an original cost of $142,000 that it accounted for using the revaluation model. It was most recently revalued to fair value on December 31, 2019, when its carrying amount was adjusted to fair value of $259,200. In January 2020, the piece of land was sold for proceeds of $259,200. In applying the revaluation model, Ayayai maintains the balance in the Revaluation Surplus (OCI) account until the asset is retired or disposed of. In 2015, Ayayai purchased a portfolio of debt investments that the company intended to hold for longer term and classified the portfolio of investments as fair value through other comprehensive income (FV-OCI) with gains/losses recycled through net income. The investments in the portfolio are traded in an active market. Ayayai records unrealized gains and losses on these investments as OCI, and then books these gains and losses to net income when they are impaired or sold. The portfolio's carrying amount on December 31, 2019, was $132,000. The entire portfolio was sold in November 2020 for proceeds of $151,200. Ayayai's income tax expense for 2020 was $118,800. Ayayai prepares financial statements in accordance with IFRS. Partial Statement of Income For the year Ended December 31, 2020 Income from Operations $ $450,000 Other Revenues and Gains Gain on disposal of Equipment $$32,400 117,200 66,000 215,600 465,600 Other Expenses and Losses V Loss on Disposal of Building (81,600) Unrealized Loss on FV-NI Investments (25,200) (106,600) Income before Income Tax 460,000 Income Tax Expense (118,800) i Net Income /(Loss) $ 342,000 Your answer is correct. Calculate retained earnings as at December 31, 2020. Ayayai Corporation Statement of Retained Earnings For the year Ended December 31, 2020 Beginning balance, January 1 $ 492,000 Add VI: Net Income / (Loss) 342,000 Ending balance, December 31 $ 834,000 e Textbook and Media Calculate net income for the year ended December 31, 2020, if Ayayai prepares financial statements in accordance with ASPE. Ayayai's income tax expense would not change. Ayayai Corporation Partial Statement of Income For the year Ended December 31, 2020 Beginning balance, January 1 $ 450,000 Other Revenues and Gains $ Your answer is partially correct. Calculate retained earnings as at December 31, 2020, if Ayayai prepares financial statements in accordance with ASPE. Assume that under ASPE, Ayayai's retained earnings at January 1, 2020, would be $558,000. Ayayai Corporation Statement of Retained Earnings For the year Ended December 31, 2020 Beginning balance, January 1 $ 558,000 Add Net Income / (Loss) Ending balance, December 31 $ e Textbook and Media Your answer is partially correct. Will the sum of the Accumulated Other Comprehensive Income and Retained Earnings under IFRS equal the balance of Retained Earnings under ASPE at December 31, 2020? Prepare a continuity schedule of the related accounts to demonstrate your answer. The sum of the AOCI and Retained Earnings under IFRS equal the balance of Retained Earnings under ASPE as follows: IFRS AOCI Retained Earnings Balance Jan. 1, 2020 $ $ Transfer of accumulated revaluation surplus on land Unrealized gain FV-OCI debt investments during 2020 i Net income 342,000 Realized gain recycled to net income i Balance Dec. 31, 2020 $ $ 1,036,400 e Textbook and Media