ted 27. On January 1, Year 1, Holzer Company hired a general contractor to begin construction of a new office building. Holzer negotiated a $900,000, five-year, 10 percent loan on January 1, Year 1, to finance construction. Payments made to the general contractor for the building during Year 1 amount to $1,000,000. Payments were made evenly throughout the year. Construction is completed at the end of Year 1, and Holzer moves in and begins using the building on January 1, Year 2. The building is estimated to have a 40-year life and no residual value. On December 31, Year 3, Holzer Company determines that the market value for the building is $970,000. 171 International Financial Reporting Standards Part I On December 31, Year 5, the company estimates the market value for the building to be $950,000. Required: Use the two alternative methods allowed by IAS 16 with respect to the mea- surement of property, plant, and equipment subsequent to initial recognition to determine: a. The carrying amount of the building that would be reported on the balance sheet at the end of Years 1-5. b. The amounts to be reported in net income related to this building for Years 1-5 In each case, assume that the building's value in use exceeds its carrying value at the end of each year and therefore impairment is not an issue. 28. Quantacc Company began operations on January 1, Year 1, and uses IFRS to prepare its financial statements. Quantacc reported net income of $100,000 in Year 5 and had stockholders' equity of $500,000 at December 31, Year 5. wishes to determine what its Year 5 income and December 31, The company Year 5, stockholders' equity would be if it had used U.S. GAAP. Relevant in- formation follows: Quantacc carries fixed assets at revalued amounts. Fixed assets were last revalued upward by $35,000 on January 1, Year 3. At that time, fixed assets had a remaining useful life of 10 years. . Quantacc capitalized development costs related to a new product in Ye in the amount of $80,000. Quantacc began selling the new product in January, Year 5, and expects the product to be marketable for a total of five years. Early in January, Year 5, Quantacc 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 20 years. Required: Calculate the following for Quantacc Company using U.S. GAAP (ignore in- come taxes): a. Net income for Year 5 b. Stockholders' equity at December 31, Year 5