Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory: Purchase Cost Replacement Cost per Unit Item Quantity Per Unit A 1,700 $3.40 B 750 4.00 C 3,900 2.40 D 1,700 5.40 Total $ 5,780 3,000 9,360 9,180 $27,320 $4.40 2.40 1.20 3.40 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. Required Required 1 2 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis. SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 $ Sales Revenue 148,000 Cost of Goods Sold: Beginning Inventory $17,000 Purchases 95,000 Goods 112,000 Available for Sale Ending Inventory 18,160X Cost of Goods Sold 84,680X Gross Profit 63,320X Operating Expenses 33,000 Income from Operations 30,320X Income Tax Expense 6,374X Net Income $21,883 X