Presented below are the balances for property plant and equipment for Summer Holdings Inc., a publicly quoted company, as at December 31, 2019. The company accounts for these assets under the cost model, using IAS 16:

Buildings		$800,000
Less: accumulated depreciation		120,000	$680,000
Equipment		$190,000
Less: accumulated depreciation		120,000	70,000

The company has decided to adopt the revaluation model for its building and equipment effective January 1, 2020. An independent appraiser has assessed the fair value of the building at $710,000 a n d equipment at $65,000 on January 1, 2020.

The company uses the straight-line method of depreciation. At January 1, 2020, the remaining useful life on the building is 20 years, and 5 years on the equipment. There is no estimated residual value on either of the assets.

REQUIRED:

Part A (4 marks)

Record the necessary journal entry(ies) to revalue the building and equipment as at January 1, 2020 using the Revaluation Model using the asset adjustment method. (SHOW ALL CALCULATIONS CLEARLY)

Part B (3 marks)

Record the appropriate journal entries for depreciation expense for BOTH assets for the year ended December 31, 2020. (SHOW ALL CALCULATIONS CLEARLY)

Question 3 (continued)

Part C (8 marks)

Due to the prevailing economic circumstances, Summer Holdings Inc. performed valuations of its buildings and equipment at January 1, 2022 as follows:

Buildings: $480,000 Equipment: $42,000

Neither the buildings nor the equipment are estimated to have any residual values and their useful lives at January 1, 2022 are now 12 years and 2 years respectively.

Calculate the carrying values of both buildings and equipment at January 1, 2022 BEFORE adjusting for the new valuations. (SHOW ALL CALCULATIONS CLEARLY) (2 marks)

Prepare the journal entries to record the revised valuations at January 1, 2022, making clear whether the respective gains/losses should be presented in net income or OCI. (SHOW ALL CALCULATIONS CLEARLY) (6 marks)

Part D (3 marks)

For the year ended December 31, 2022

Calculate the depreciation expense for each asset; and

Show the calculation of the carrying amount of each asset that would appear in the Balance Sheet of Summer Holdings Inc at December 31, 2022. (3 marks)