December 31. The company Springer Anderson Gymnastics prepared its annual financial statements dated used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The preliminary income statement follows $150,000 Sales Revenue Cost of Goods Sold Beginning Invetory Purchases 17,500 96,000 Goods Available for Sale Ending Inventory (FIFO cost) 29,150 Cost of Goods Sold 84,350 Gross Profit Operating Expenses 65,650 33,500 32,150 9,645 Income from Operations Income Tax Expense (30%) Net Income 22,505 Assume that you have been asked to restate the financial statements to incorporate LCM. You have developed the following data relating to the ending inventory Purchase Cost Market Value Totalper Unit item Quantity Per Unit A 1,750 $3.50 $ 6,125$4.50 800 4.25 2.50 3,400 10,000 2.50 C 4,000 D 1,750 5.509,625 3.50 $29,150 Required: 1. Restate the income statement to reflect LCM valuation of the ending inventory. Apply LCM on an item- by-item basis. SPRINGER ANDERSON GYMNASTICS Income Statement (LCM basis) For the Year Ended December 31 1 Sales Revenue $150,000 Cost of Goods Sold: Beginning Inventory Purchases $ 17,500 96,000 113,500 29,150 Goods Available for Sale Ending Inventory Cost of Goods Sol 84.350 65,650 33,500 321,500 9,650 $22,505 Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income 2. Compare the LCM effect on each amount that was changed in requirement 1. (Decreases should be indicated by a minus sign.) FIFO Cost Basis Amount of Increase Item Changed LCM Basis (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income