Question

Lisali Company gathered the following information related to inventory that it owned on December 31, 2015:

Historical cost	$	153,000
Replacement cost		143,450
Net realizable value		149,200
Normal profit margin		20	%

a.	Determine the amount at which Lisali should carry inventory on the December 31, 2015, balance sheet and the amount, if any, that should be reported in net income related to this inventory using (1) U.S. GAAP and (2) IFRS.

	U.S. GAAP IFRS Inventory on December 31, 2015, balance sheet Amount reported in net income (loss)

b.	Determine the adjustments that Lisali would make in 2015 to reconcile net income and stockholders’ equity under U.S. GAAP to IFRS. (If there is no reconciliation adjustment select "No adjustment is required to".)

	2015 Adjustments U.S. GAAP Net income U.S. GAAP Stockholders' equity

Answer 1

Det the amount eunining carry inventory at when usato on Decembe 31 should 2018 Inventory on a lance sheet PRO Pauhulau LUS GAAP IFRS on December 31, 2015 $143,450 $149,200 balance sheet Pico amount in net Income (LASS 194550) (3880) (NO H) (Note) Note Net Income (US GAAP) Net Income (IFRS) Replacement test = $143,450 Net Realizable value = 1 149,200) less Misto sical - = $(153,000) Less Hestorical Valle = (153,000 valul 19550 C3880

- I'm US GAAP U Lowen of cest and eis neplacement cast as Inventory 1 the Ши would Mecencele a net Income come and $ 5620 Inventory repouts at a Meeported Under PERS lowen of est and NRV u weepcuted sonventory Det the adjustment that tisali make in 2015 do and stock holder equity 2203 2015 Ad US GAAP Net Income ($9550-$3880) U.S GAAP stockholder's = 69550 - 3880) CRED IN DER equity - $ 5620 siffurent amounts in Inventory Loss under US GAAD and IFRS will add $5620 ito Us GAP Jou weco rcle IFRS to US GAAP stockholdere's equity, to reconcile stockholder equity soljustments 5620 > theme is đa 2isa 1 F RS