7 Mondetta Clothing prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to evaluate the net realizable value of its ending inventory. The preliminary income statement follows: $432,000 13 points $ 48,000 279,000 327,000 87,840 Net Sales Cost of Goods Sold Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income eBook 239, 160 192,840 96,000 96,840 29,052 $ 67,788 Print Assume that you have been asked to restate the financial statements to incorporate LCM/NRV. You have developed the following data relating to the ending inventory: Acquisition Cost Item B C D Quantity 3,600 1,800 7,600 Per Unit $5.10 7.20 3.60 8.10 Total $18,360 12,960 27,360 29,160 $87,840 Net Realizable Value per Unit $6.60 3.60 6.60 5.10 3,600 Required: 1. Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis. 2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1