Question

Blue Spruce Corporation, a clothing retailer, had income from operations (before tax) of $307,500, 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-NI investments (Loss)/gain on disposal of building Gain on disposal of FV-Nl investments 22,140 (44,280) (55,760) 27,060 Blue Spruce 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) $336,200 35,120 45,100 As at January 1, 2020, Blue Spruce 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 $177,120. In January 2020, the piece of land was sold for proceeds of $177,120. In applying the revaluation model, Blue Spruce maintains the balance in the Revaluation Surplus (OCI) account until the asset is retired or disposed of. In 2015, Blue Spruce 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. Blue Spruce 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 $90,200. The entire portfolio was sold in November 2020 for proceeds of $103,320. Blue Spruce's income tax expense for 2020 was $81,180. Blue Spruce prepares financial statements in accordance with IFRS.

Answer 1

Income from operations		307500
Gain on disposal of equipment	22140
gain on disposal of FV NI investments	27060
Gain on disposal of FV OCI investments	13120
Gain on disposal of land	35120
Total other income		97440
		404940
Other expenses and losses
Loss on discposal of building	55760
Unrealised loss on FV NI investments	44280	100040
Income before income tax		304900
Tax expense		81180
Profit after tax		223720

Land
Sold at profit of Rs 35120
Under ASPE the assets are recorded at historical costs and hence gain form part of income statement
FV OCI investments
Sale price	103320
Cost Price (90200-45100)	45100
Profit	58220
Already accounted for in revalution	45100
Balance gains	13120
Actively traded investments under ASPE are recodered at fair value

	IFRS			ASPE
	AOCI	Retained earnings		Retained earnings
Balance as on Jan1	80220	336200		416420
Less: Transfer of accumulated surplus of land	-35120
Less: Ralised gain on FV-OCI recycled to net income	-45100
Income during the year		188600		223720
Balance as on Dec 31		524800		640140