Big Boy Rekadz prepared its annual financial statements dated December 31 of the current year. The company applies the FIFO inventory costing method; however, the company neglected to apply LCM to the ending inventory. The preliminary current year income statement follows:

Sales revenue

$

289,000

Cost of goods sold

Beginning inventory

$

33,900

Purchases

193,000

Goods available for sale

226,900

Ending inventory (FIFO cost)

61,584

Cost of goods sold

165,316

Gross profit

123,684

Operating expenses

62,900

Pretax income

60,784

Income tax expense (30%)

18,235

Net income

$

42,549

Assume that you have been asked to restate the current year financial statements to incorporate LCM. You have developed the following data relating to the current year ending inventory:

		Acquisition Cost				Net Realizable Value
Item	Quantity	Unit		Total		(Market)
A	3,140	$	3.9	$	12,246	$	4.9
B	1,590		5.9		9,381		4.4
C	7,190		2.4		17,256		4.4
D	3,290		6.9		22,701		4.9
				$	61,584

Required 1. Prepare the income statement to reflect LCM valuation of the current year ending inventory. Apply LCM on an item-by-item basis (Round your answers to nearest dollar amount.) JAFFA COMPANY Income Statement (LCM basis) For the Year Ended December 31, Current Year Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Gross profit Operating expenses Pretax income ncome tax expense Net income