On July 1, 2020, Ayayai Ltd , a publicly listed company, acquired assets from Whispering Winds Ltd On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows Manufacturing plant (building 1) $399,680 Storage warehouse (building 2) 209,720 Machinery (in building 1) 74,700 Machinery (in building 2) 44,100 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment In exchange for the acquisition of these assets, Ayayai issued 145,920 common shares Ayayais shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies) In the most recent sale of Ayayais shares on the Toronto Stock Exchange, 970 shares were sold for $5 per share At the time of acquisition, both buildings were considered to have an expected remaining useful life of 10 years, the machinery in building 1 was expected to have a remaining useful life of 3 years, and the machinery in building 2 was expected to have a useful life of 9 years Ayayai uses straight line depreciation with no residual values At December 31, 2020, Ayayais fiscal year end, Ayayai recorded the correct depreciation amounts for the six months that the assets were in use An independent appraisal concluded that the assets had the following fair values Manufacturing plant (building 1) $387,600 Storage warehouse (building 2) 178,600 At December 31, 2021, Ayayai once again retained an independent appraiser and determined that the fair value of the assets was Manufacturing plant (building 1) $339,630 Storage warehouse (building 2) 160,930 Q Assume that the asset revaluation surplus for the buildings was prepared based on a class by class basis rather than on an individual asset basis as required by IAS 16 Prepare the journal entries for 2020 and 2021 that relate to the buildings (Ignore the machinery accounts since they are accounted for using the cost model ) Debit Credit Date Account Titles and Explanation July 1, 2020 Dec 31, 2020 (To record depreciation on Building 1) Dec 31, 2020 (To record depreciation on Building 2) Dec 31, 2020 (To revalue (Building 1) and (Building 2) Debit Credit Date Account Titles and Explanation Dec 31, 2021 (To record depreciation on Building 1) Dec 31, 2021 (To record depreciation on Building 2) Dec 31, 2021 (To revalue (Building 1) and (Building 2)) Debit Credit Date Account Titles and Explanation July 1, 2020 Dec 31, 2020 (To record depreciation on Building 1) Dec 31, 2020 (To record depreciation on Building 2) Dec 31, 2020 (To revalue (Building 1) and (Building 2) Debit Credit Date Account Titles and Explanation Dec 31, 2021 (To record depreciation on Building 1) Dec 31, 2021 (To record depreciation on Building 2) Dec 31, 2021 (To revalue (Building 1) and (Building 2))

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On July 1, 2020, Ayayai Ltd., a publicly listed company, acquired assets from Whispering Winds Ltd. On the transaction date, a reliable, independent valuator assessed

On July 1, 2020, Ayayai Ltd., a publicly listed company, acquired assets from Whispering Winds Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows:

Manufacturing plant (building #1)		$399,680
Storage warehouse (building #2)		209,720
Machinery (in building #1)		74,700
Machinery (in building #2)		44,100

The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment. In exchange for the acquisition of these assets, Ayayai issued 145,920 common shares. Ayayais shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Ayayais shares on the Toronto Stock Exchange, 970 shares were sold for $5 per share. At the time of acquisition, both buildings were considered to have an expected remaining useful life of 10 years, the machinery in building #1 was expected to have a remaining useful life of 3 years, and the machinery in building #2 was expected to have a useful life of 9 years. Ayayai uses straight-line depreciation with no residual values. At December 31, 2020, Ayayais fiscal year end, Ayayai recorded the correct depreciation amounts for the six months that the assets were in use. An independent appraisal concluded that the assets had the following fair values:

Manufacturing plant (building #1)		$387,600
Storage warehouse (building #2)		178,600

At December 31, 2021, Ayayai once again retained an independent appraiser and determined that the fair value of the assets was:

Manufacturing plant (building #1)		$339,630
Storage warehouse (building #2)		160,930

Q: Assume that the asset revaluation surplus for the buildings was prepared based on a class-by-class basis rather than on an individual asset basis as required by IAS 16. Prepare the journal entries for 2020 and 2021 that relate to the buildings. (Ignore the machinery accounts since they are accounted for using the cost model.)

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Debit Credit Date Account Titles and Explanation July 1, 2020 Dec. 31, 2020 (To record depreciation on Building #1) Dec. 31, 2020 (To record depreciation on Building #2) Dec. 31, 2020 (To revalue (Building #1) and (Building #2) Debit Credit Date Account Titles and Explanation Dec. 31, 2021 (To record depreciation on Building #1) Dec 31, 2021 (To record depreciation on Building #2) Dec 31, 2021 (To revalue (Building #1) and (Building #2)) Debit Credit Date Account Titles and Explanation July 1, 2020 Dec. 31, 2020 (To record depreciation on Building #1) Dec. 31, 2020 (To record depreciation on Building #2) Dec. 31, 2020 (To revalue (Building #1) and (Building #2) Debit Credit Date Account Titles and Explanation Dec. 31, 2021 (To record depreciation on Building #1) Dec 31, 2021 (To record depreciation on Building #2) Dec 31, 2021 (To revalue (Building #1) and (Building #2))