The following information is abstracted from balance sheet of Center Technology Corporation : Historical cost $ 12 , 000 Replacement cost $ 7 , 000 Expected selling Price $ 9 , 000 Expected selling cost $ 500 Normal profit margin 50 % of price

Required : 1 . Describe how IFRS and U . S . GAAP differ in their approach to recognition of inventory . ( 8 marks )

2 . What should the balance sheet report for Inventory under IFRS and U . S . GYAP ? ( 6 marks )

3. Assume that the expected selling price increases to $ 13 , 000 ( all the rest of the facts are the same ) . What should the balance sheet report for Inventory under IFRS and U . S . GAAP ? Prepare the necessary adjustment to inventory . ( 6 marks )

4 . Determine and explain the impacts of the above adjustment on financial statement analysis.