Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Total Luxury Sporty Sales revenue $490,000 $360,000 $130,000 Variable expenses 355,000 235,000 120,000 Contribution margin 135,000 125,000 10,000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $59,000 $87,000 $(28,000) 1. Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $32,000 per year, how will operating income be affected

Trecek corporation incurs research and development costs of $625,000 in 2017, 30 percent of which relate to development activities subsequent to ias 38 criteria having been met that indicate an intangible asset has been created. the newly developed product is brought to market in january 2018 and is expected to generate sales revenue for 10 years. assume that a u.s.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with ifrs. thus, adjustments to convert from u.s. gaap to ifrs must be made. ignore income taxes. required: (a) prepare journal entries for research and development costs for the years ending december 31, 2017, and december 31, 2018, under (1) u.s. gaap and (2) ifrs. (c) prepare the entry(ies) that trecek would make on the december 31, 2017, and december 31, 2018, conversion worksheets to convert u.s. gaap balances to ifrs.