You have been provided with the following information for two companies; Company A and Company B:

i. Company A

Company A prepares financial statements to December 31 each year. On December 31, 2020, the company acquired land for $900,000. This land was revalued at $1,100,000 on December 31,2021 and at $1,200,000 on December 31, 2022.

ii. Company B

Company B prepares financial statements to December 31 each year. On December 31, 2021, the company acquired land for $600,000. This land was revalued at $520,000 on December 31, 2022 and at $540,000 on December 31, 2023.

Both companies use the revaluation model. Ignore depreciation.

Please note A revaluation reserve is a non-cash reserve created to reflect the true value of the asset when the market value of a certain category of asset is more or less than the value of such asset at which it is recorded in the books of account. Any increase in value will be credited (increase the reserve a/c) to this account, and any decrease in value will be debited (decrease the reserve a/c) to the account.

Revaluation gains are recognised in equity

The Asset account on the other hand is referring to the actual account of the asset (eg. Land a/c). Whenever there is an increase in the valuation of an asset, the asset account would be debited to reflect the increase. If the value decreases, the asset account would be credit to reflect the decrease.

Prepare financials for both companies using the revaluation model.