QualCore held no investment properties at the start of Year 5. However, on January 1, it purchased an office facility for $1.2 million and immediately began leasing it to tenants. QualCore accounts for this investment property using the fair value method. An appraiser reported that the facility's fair value was $1.4 million on December 31, Year 5. If QualCore had used the cost method for the facility, it would have computed depreciation using a 20-year useful life with no residual value.

QualCore capitalized development costs related to a new product in Year 4 in the amount of $800,000. QualCore began selling the new product in January, Year 5, and expects the product to be marketable for a total of five years.

Required:

1.Determine net income for Year 5 if QualCore had used U.S. GAAP.

2.Determine stockholders' equity at December 31, Year 5, if QualCore had used U.S. GAAP.