7 17.00 points Smart Company prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The preliminary income statement follows: $312,000 Sales Revenue Cost of Goods Sold Beginning Inventory $ 46,000 214,000 Goods Available for Sale Ending Inventory (FIFO cost) 260,000 154,500 Cost of Goods Sold 105,500 Gross Proit Operating Expenses 206,500 77,000 Income from Operations Income Tax Expense (30%) 129,500 38,850 Net Income $90,650 Assume that you have been asked to restate the financial statements to incorporate LCM. You have developed the following data relating to the ending inventory Purchase Cost Value per Itemuantity Per Unit 3,500 1,900 8,600 3,200 Total 35,000 13,300 77,400 28,800 $10 $154,500 TIP: Inventory write-downs do not affect the cost of goods available for sale. Instead, the effect of the write- down is to reduce ending inventory, which increases Cost of Goods Sold and then affects other amounts reported lower in the income statement