The Following Information Pertains to Inventory Held by a Company

The following information pertains to inventory held by a company on December 31, 2011. $$\begin{array} { l r } \text { Historical cost } & \$ 30,000 \\\text { Replacement cost } & \$ 20,000 \\\text { Net realizable value } & \$ 27,000 \\\text { Normal profit margin } & 20 \%\end{array}$$
-As a result of inventory loss, what is the difference in income between reporting using U.S. GAAP and IFRS?

A) U.S. GAAP income is $3,000 higher.
B) U.S. GAAP income is $10,000 lower.
C) IFRS income is $8,400 higher.
D) IFRS income is $3,000 lower.
E) IFRS income is $5,400 higher. U.S. GAAP loss is $8,400 and IFRS loss is $3,000 resulting in IFRS income being $5,400 higher.