principal company is a u.s. based company the prepares its consolidated financial statements in accordance to gaap. principle reported net income of 2,600,000 in 2013 and stockholders equity of 12,000,000 at dec 31, 2013. principal wants to determine the reporting impact of switching to ifrs. the following three items would create differences in financial reporting. 1) at dec 31,2013 inventory had a historical cost of $850,000, a replacement cost of $700,000, and a net realizable value of $800,000. the profit margine was 10% 2) principal acquired a building at the beginning of 2011 at a cost of $5,000,000. the building has an estimated useful life of 20 years, an estimated residual value of $1,000,000, and is being depreciated on a straight-line basis. on january 1, 2013 the building has a fair value of $5,500,000. there is no change in the estimated useful life or risdual value. in a switch to ifrs, principal would use the revaluation model in ias 16 to determine the carrying value of property, plant, and equipment subsequent to acquisition. 3) in 2013, principal incurred $800,000 of reserch and development for a new product, of which 35% relates to development activities subsequent to the point of criteria indicating the creation of an intangible asset had been met. as of the end 2013, development of the new product had not been completed. 1) prepare a schedule reconciling net income under u.s. gaap to net income under ifrs for the year ended december 31, 2013 2) prepare a schedule reconciling stock holders' equity under u.s. gaap to stockholders' equity under ifrs at dec 31, 2013