Crane Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2017. Jim Alcide, controller for Crane, has gathered the following data concerning inventory. At May 31, 2017, the balance in Cranes Raw Materials Inventory account was $481,440, and Allowance to Reduce Inventory to Market had a credit balance of $26,190. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Cranes May 31, 2017, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing.

Cost Replacement Cost Sales Price Net Realizable Value Normal Profit Aluminum siding $82,600 $73,750 $75,520 $66,080 $6,018 Cedar shake siding 101,480 93,692 110,920 100,064 8,732 Louvered glass doors 132,160 146,320 219,952 198,594 21,830 Thermal windows 165,200 148,680 182,664 165,200 18,172 Total $481,440 $462,442 $589,056 $529,938 $54,752

(a1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2017.

Balance in the Allowance to Reduce Inventory to Market $

(a2) For the fiscal year ended May 31, 2017, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market.

The amount of the gain (loss) $