Erter text to search Chapter 7 Homework Help Save & Exit Check my work 2. PA7-2 Evaluating the Income Statement and Income Tax Effects of Lower of Cost or Market/Net Realizable Value [LO 7-4) Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory using the UFO inventory costing method but did not compare the cost of its ending inventory to its market value freplacement cost). The preliminary income statement follows: $136,000 $ 14,000 89, eee 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 103,000 24,150 78,850 57,150 30,000 27,150 8,145 $ 19,005 Assume that you have been asked to restate the financial statements to incorporate the LCMNRV rule. You have developed the following data relating to the ending inventory o Help 7 Homework Save & E Ched 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 Ite B D Quantity 2,100 750 3,380 2,100 Per Unit $2.80 3.00 1.80 4.80 Total $ 5,880 2,250 5,940 10,080 $24,150 Replacement Cost per Unit $3.80 1.80 0.90 2.80 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, Complete this question by entering your answers in the tabs below. Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis conetex nal browser baun text to search No results Options ter 7 Homework Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending in Book Print SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 Sales Revenue $ 136,000 Cost of Goods Sold Beginning Inventory $ 14,000 Purchases 89,000 Goods Available for Sale 103,000 Ending Inventory 24,150 Cost of Goods Sold 78,850 Gross Profit 57,150 Operating Expenses 30,000 Income from Operations 27,150 Income Tax Expense 8,145 Net Income $ 19,005 Requi