Ramshare Company acquired equipment at the beginning of 2009 at a cost of $100,000. The equipment has a five-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2009, Ramshare compiled the following information related to this equipment: LO4 Expected future cash flows from use of the equipment $85,000 Present value of expected future cash flows from use of the equipment 75,000 Fair value (net selling price), less costs to dispose 72,000

a. Determine the amount at which Ramshare should carry this equipment on its December 31, 2009, balance sheet and the amount, if any, that it should report in net income related to this inventory using (1) IFRS and (2) U.S. GAAP.

b. Determine the adjustments that Ramshare would make in 2009 and 2010 to reconcile net income and stockholders’ equity under IFRS to a U.S. GAAP basis. Ignore the possibility of any addi¬ tional impairment at the end of 2010.