Check my work 2. Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory using the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). The preliminary income statement follows: 15 points $ 128,000 eBook $ 12,000 85,000 97,000 21,800 Print Sales Revenue 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 References 75, 200 52,800 28,000 24,800 7,440 $ 17, 360 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: Item A B D Quantity 2,300 700 2,900 2,300 Purchase Cost Replacement Cost per Per Unit Total Unit $ 2.40 $ 5,520 $ 3.40 3.00 2,100 1.40 1.40 4,060 .70 4.40 10, 120 2.40 $ 21,800 Check my work 2 Requireu: 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. 15 points Complete this question by entering your answers in the tabs below. eBook Print Required 1 Required 2 References 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 $ 128,000 $ Cost of Goods Sold: Beginning Inventory Purchases Goods Available for Sale 12,000 85,000 97,000 14,050 Ending Inventory Cost of Goods Sold 82,950 45,050 Gross Profit 28,000 Operating Expenses Income from Operations 17,050 Check my work 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 15 points Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis. eBook SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 Print References Sales Revenue $ 128,000 Cost of Goods Sold: $ 12,000 85,000 Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold 97,000 14,050 82,950 45,050 28,000 Gross Profit Operating Expenses Income from Operations Income Tax Expense 17,050 Net Income Check my work 2 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. 15 points Complete this question by entering your answers in the tabs below. eBook Print Required 1 Required 2 References Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1. (Decreases should be indicated by a minus sign.) Item Changed LIFO Cost Basis LCM/NRV Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income
