Lisali Company gathered the following information related to inventory that it owned on December 31, 2009: LO4

$100,000 Historical cost Replacement cost Net realizable value Normal profit margin 95,000 98,000 20%

a. Determine the amount at which Lisali should carry inventory on the December 31, 2009, bal¬ ance sheet and the amount, if any, that should be reported in net income related to this inventory using (1) IFRS and (2) U.S. GAAP.

b. Determine the adjustments that Lisali would make in 2009 to reconcile net income and stock¬ holders’ equity under IFRS to a U.S. GAAP basis.