Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost of $78,400. The equipment was expected to have a useful life of 6 years and a residual value of $10,000 and is being depreciated on a straight-line basis. On January 1, 2016, the equipment was appraised and determined to have a fair value of $74,500, a salvage value of $10,000, and a remaining useful life of five years. Show work.

a.

Determine the amount of depreciation expense that Bracy should recognize in determining net income in 2015, 2016, and 2017 and the amount at which equipment should be carried on the December 31, 2015, 2016, and 2017 balance sheets using (1) U.S. GAAP and (2) IFRS. In measuring property, plant, and equipment subsequent to acquisition, Bracy uses the revaluation model in IAS 16.

Depreciation Expense
	2015	2016	2017
IFRS
U.S. GAAP
Difference	$	$	$

Book Value of equipment
	12/31/2015	12/31/2016	12/31/2017
IFRS
U.S. GAAP
Difference	$	$	$

b.

Determine the adjustments that Bracy would make in 2015, 2016, and 2017 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". Input all values as positive numbers.)

2015 Adjustments

Amount deducted from	U.S. GAAP Net Income	$
Amount Added to	U.S. GAAP Stockholders equity	$

2016 Adjustments
Amount deducted from	U.S. GAAP Net Income	$
Amount Added to	U.S. GAAP Stockholders equity	$

2017 Adjustments
Amount deducted from	U.S. GAAP Net Income	$
Amount Added to	U.S. GAAP Stockholders equity	$