Solution-Prepare a reconciliation of lilys stockholders

Prepare a reconciliation of lilys stockholders equity of

Reference no: EM13576380

Prepare a reconciliation of Lily's stockholders' equity of $100,000 to U.S. GAAP. Ignore income taxes.

The following financial information is for Lily Company, a non-U.S. firm with shares listed on a U.S. stock exchange.

Net income, computed according to home country GAAP	$ 10,000
Stockholders' equity, computed according to home country GAAP	100,000
Research and development costs last year of $80,000; amortization
of these costs this year (same amortization amount as last year)	16,000
Interest expense	4,700

If Lily were following U.S. GAAP, the entire $80,000 in research and development costs would have been expensed immediately last year when it was incurred. Under U.S. GAAP, the entire $4,700 in interest expense would have been capitalized. There was interest expense of $2,000 recognized in the prior year in association with the same project; the associated construction is not yet completed, so no depreciation would have been recognized. Reconcile Lily's net income of $10,000 to U.S. GAAP. Ignore income taxes.

Reference no: EM13576380

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Prepare a reconciliation of lilys stockholders equity of

Reference no: EM13576380

Reference no: EM13576380

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