Garcia Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes in northem New Jersey and southem New York. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2022, and Jim Alcide, controller for Garcia, has gathered the following data conceming inventory At May 31, 2022, the balance in Garcia's Raw Material Inventory account was $272,500 and the Allowance to Reduce Inventory to NRV had a credit balance of $10,680 Alcide summarized the relevant inventory cost and market data at May 31, 2022, in the schedule below. Alcide assigned Patricia Devereaux, an intem from a local college, the task of calculating the amount that should appear on Garole's May 31, 2022, financial statements for inventory under the lower-of-cost-or-NRV rule as applied to each item in Inventory. Devereaux expressed concem over departing from the cost principle. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Cost $35,200 87,500 112,700 37,100 $272,500 Replacement Cost $32,500 79,400 124,000 26,000 $261,900 Sales Price $34.000 94.000 186,400 54,800 $369,200 Net Realizable Value $24,000 83,800 160,300 38,000 $306,100 Normal Profit $2,100 7,400 18,500 5,400 $33,400 Instructions: (1) Determine the proper balance in the Allowance to Reduce Inventory to NRV at May 31, 2022. Calculations of Proper Balance on the Allowance to Reduce Inventory to NRV At May 31, 2022 LCNRV Aluminum siding Cedar shake siding Louvered glass doors Themal Windows Totals Inventory cost LCNRV valuation Allowance at May 31, 2022 (2) For the fiscal year ended May 31, 2022, determine the amount of the gain or loss that would be recorded due to the change in the Allowance to Reduce Inventory to NRV. Reord the journal entry