To determine the amount at which inventory should be reported on the December 31, Year 1 balance sheet, Monroe Company compiles the following information for its inventory of Product Z on hand at that date:

The entire inventory of Product Z that was on hand at December 31, Year 1 was completed in Year 2 at a cost of $1,800 and sold at a price of $17,150. 

Required:
a. Determine the impact that Product Z has on income in Year 1 and Year 2 under (1) IFRS and (2) U.S. GAAP.
b. Summarize the difference in income, total assets, and total stockholders’ equity using the two different sets of accounting rules over the two-year period.

Historical cost... Replacement cost Estimated selling price.. Estimated costs to complete and sell.. Normal profit margin as a percentage of selling price $20,000 14,000 17,000 2,000 20%