Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northern New Jersey and southern New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2014, and Jim Alcide, controller for Garcia, has gathered the following data concerning inventory. At May 31, 2014, the balance in Garcias Raw Materials Inventory account was $530,808, and Allowance to Reduce Inventory to Market had a credit balance of $26,980. Alcide summarized the relevant inventory cost and market data at May 31, 2014, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Garcias May 31, 2014, financial statements for inventory under the lower-of-cost-or-market rule as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle.

Cost		Replacement Cost			Sales Price			Net Realizable Value			Normal Profit
Aluminum siding		$ 91,070		$ 81,313			$ 83,264			$ 72,856			$ 6,635
Cedar shake siding		111,886		103,299			122,294			110,325			9,627
Louvered glass doors		145,712		161,324			242,506			218,958			24,069
Thermal windows		182,140		163,926			201,395			182,140			20,035
Total		$530,808		$509,862			$649,459			$584,279			$60,366

(a1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2014.

Balance in the Allowance to Reduce Inventory to Market:

(a2) For the fiscal year ended May 31, 2014, 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 loss