Carl and Ellie #2

Carl Corp. Prepares its financial statements under U.S. GAAP

Ellie prepares its financial statements under IFRS

You have gained the following insights:

Carl and Ellie are the same company except they use different accounting standards. You are tasked with maintaining the financial statements for both standards and periodically reconciling certain account balances.

For year 2016 you acquire the following additional information:

• 60% of the R&D expenses are classified as development expenses that will begin to amortize over 5 years beginning 1/1/17 (ellie- part will be an asset)
• A year-end impairment test is performed on the machine and the following is noted:

Book Value $192,000

Sales Price (if sold) $180,000

Selling Costs $5,000

NPV $180,000

Future Cash Flows (undiscounted) $200,000

Using the above information, prepare the financial statement for both Carl and Ellie for the year ending 12/31/16. Use the same spreadsheet but set up different sheets for each Show the journal entries as well for each company.