Surat Limited paid cash to acquire an aircraft on January 1, 2020, at a cost of 32,320,000 rupees. The aircraft has an estimated useful life of 50 years and no salvage value. The company has determined that the aircraft is composed of three significant components with the following original costs (in rupees) and estimated useful lives:

Component	Cost	Useful Life
Fuselage	11,600,000	50	years
Engines	15,500,000	40	years
Interior	5,220,000	30	years
	32,320,000

The U.S. parent of Surat does not depreciate assets on a component basis, but instead depreciates assets over their estimated useful life as a whole.

Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.

Required:

a. Prepare journal entries for this aircraft for the years ending December 31, 2020, and December 31, 2021, under (1) IFRS and (2) U.S. GAAP.

• Record the entry for the cost of aircraft on its purchase as per IFRS.
• Record the entry for the depreciation of aircraft as per IFRS.
• Record the entry for the cost of aircraft on its purchase as per U.S. GAAP.
• Record the entry for the depreciation of aircraft as per U.S. GAAP.
• Record the entry for the depreciation of aircraft as per IFRS.
• Record the entry for the depreciation of aircraft as per U.S. GAAP.
• 

b. Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020, and December 31, 2021, conversion worksheets to convert IFRS balances to U.S. GAAP.

• Record the conversion entry needed for 12/31/20.
• Record the conversion entry needed for 12/31/21.
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No 1 2 3 4 5 6 Date 01/01/2020 12/31/2020 01/01/2020 12/31/2020 12/31/2021 12/31/2021 Aircraft Cash General Journal Depreciation expense Accumulated depreciation - Aircraft Depreciation expense Accumulated depreciation - Aircraft Aircraft Cash Depreciation expense Accumulated depreciation - Aircraft Depreciation expense Accumulated depreciation - Aircraft >> ✓ ✓ X X XX > > ✓ 33 Debit 32,320,000✔ 793,500 793,500 32,320,000 X 646,400 X 646,400 Credit 32,320,000 793,500 793,500 x 32,320,000 X 646,400 646,400 No 1 2 3 4 5 6 Date 01/01/2020 12/31/2020 01/01/2020 12/31/2020 12/31/2021 12/31/2021 Aircraft Cash General Journal Depreciation expense Accumulated depreciation - Aircraft Depreciation expense Accumulated depreciation - Aircraft Aircraft Cash Depreciation expense Accumulated depreciation - Aircraft Depreciation expense Accumulated depreciation - Aircraft >> ✓ ✓ X X XX > > ✓ 33 Debit 32,320,000✔ 793,500 793,500 32,320,000 X 646,400 X 646,400 Credit 32,320,000 793,500 793,500 x 32,320,000 X 646,400 646,400