I need help with 2 Accounting problems. Please see attachment.

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Problem 1 Bessrawl Corporation is a U.S-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2014 of $1,000,000 and stockholders' equity at December 31, 2014, of $8,000,000. The CFO of Bessrawl has learned that the U.S Securities and Exchange Commission is considering requiring U.S companies to use IFRS in preparing consolidated financial statements. The company wishes to determine the impact that a switch to IFRS would have on its financial statements and has engaged you to prepare a reconciliation of income and stockholders' equity from U.S GAAP to IFRS. You have identified the following five areas in which Bessrawl's accounting principles based on U.S GAAP differ from IFRS. 1. Inventory 2. Property,plant,and equipment 3. Intangible assets 4. Research and development cost 5. Sale-and-leaseback transaction Bressrawl provided the following information with respect to each of theses accounting differences. Inventory At year end-end 2014, inventory had a historical cost of $250,000, a replacement cost of $180, 000, a net realizable value of $190,000, and a normal profit margin of 20 percent. Property, Plan, and Equipment The company acquired a building at the beginning of 2013 at a cost of $2,750,000 the building has an estimated useful life of 25 years, an estimated residual value of $250,000, and is being depreciated on a straightline basis. At the beginning of 2014, the building was appraised and determined to have a fair value of $3,250,000. There is no change in estimated useful life or residual value. In a switch to IFRS, the company would use the revaluation model in IAS 16 to determine the carrying value of property, plant, and equipment subsequent to acquisition. Intangible Assets As part of a business combination in 2011, the company acquired a brand with a fair value of $ 40,000. The brand is classified as an intangible asset with an indefinite life. At year-end 2014, the brand is determined to have a selling price of $35,000 with zero cost to sell. Expected future cash flows from continued use of the brand are $42,000 and the present value of the expected future cash flow is $34,000. Research and Development Costs The company incurred research and development cost of $200,000 in 2014. Of this amount, 40 percent related to development activities subsequent to the point at which criteria had been met indicating that an intangible asset existed. As of the end of the 2014, development of the new product had not been completed. Sale-and-Leaseback In January 2012, the company 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 five years. Required Prepare a reconciliation schedule to convert 2014 income and December 31, 2014, stockholders' equity from a U.S. GAAP basis to IFRS. Ignore income taxes. Prepare a note to explain each adjustment made in the reconciliation schedule. Problem 2 S. A. Harrington Company is a U.S.-based company that prepares its consolidated financial statements in accordance with U.S. GAAP. The company reported income in 2015 of $5,000,000 and stockholders' equity at December 31, 2015, of $40,000,000. The CFO of S. A. Harrington has learned that the U.S. Securities and Exchange Commission is considering requiring U.S. companies to use IFRS in preparing consolidated financial statements. The company wishes to determine the impact that a switch to IFRS would have on its financial statements and has engaged you to prepare a reconciliation of income and stockholders' equity from U.S. GAAP to IFRS. You have identified the following five areas in which S. A. Harrington accounting principles based on U.S. GAAP differ from IFRS. 1. 2. 3. 4. 5. Restructuring Pension plan Stock options Revenue recognition Bonds payable The CFO provides the following information with respect to each of these accounting differences. Restructuring Provision The company publicly announced a restructuring plan in 2015 that created a valid expectation on the part of the employees to be terminated that the company will carry out the restructuring. The company estimated that the restructuring would cost $300,000. No legal obligation to restructure exists as of December 31, 2015. Pension Plan In 2013, the company amended its pension plan, creating a past service cost of $60,000. The past service cost was attributable to already vested employees who had an average remaining service life of 15 years the company has no retired employees. Stock Options Stock options were granted to key officers on January 1, 2015. The grant date fair value per option was $10, and a total of 9,000 options were granted. The options vest in equal installments over three years: one-third vest in 2014, one-third in 2015, and one-third in 2016. The company uses a straightline method to recognize compensation expense related to stock options. Revenue Recognition The company entered into a contract in 2015 to provide engineering services to a long-term customer over a 12-month period. The fixed price is $250,000, and the company estimates with a high degree of reliability that the project is 30 percent complete at the end of 2015. Bonds Payable On January 1, 2014, the company issued $10,000,000 of 5 percent bonds at par value that mature in five years on December 31, 2018. Costs incurred in issuing the bonds were $500,000. Interest is paid on the bonds annually. Required Prepare a reconciliation schedule to reconcile 2015 net income and December 31, 2015 stockholders equity from a U.S. GAAP basis to IFRS. Ignore income taxes. Prepare a note to explain each adjustment made in the reconciliation schedule