Quantacc Company began operations on January 1, Year 1, and uses IFRS to prepare its financial statements.

Question:

Quantacc Company began operations on January 1, Year 1, and uses IFRS to prepare its financial statements. Quantacc reported net income of $100,000 in Year 5 and had stockholders' equity of $500,000 at December 31, Year 5. The company wishes to determine what its Year 5 income and December 31, Year 5, stockholders' equity would be if it had used U.S. . Relevant information follows:
• Quantacc carries fixed assets at revalued amounts. Fixed assets were last revalued upward by $35,000 on January 1, Year 3. At that time, fixed assets had a remaining useful life of 10 years.
• Quantacc capitalized development costs related to a new product in Year 4 in the amount of $80,000. Quantacc began selling the new product in January, Year 5, and expects the product to be marketable for a total of five years.
• Early in January, Year 5, Quantacc realized a gain on the sale-and-leaseback of an office building in the amount of $150,000. The lease is accounted for as an operating lease, and the term of the lease is 20 years.
Required:
Calculate the following for Quantacc Company using U.S. (ignore income taxes):
a. Net income for Year 5.
b. Stockholders' equity at December 31, Year 5. GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...