Headland 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, 2020. Jim Alcide, controller for Headland, has gathered the following data concerning inventory. At May 31, 2020, the balance in Headlands 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, 2020, in the schedule below. Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Headlands May 31, 2020, 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, 2020.

Balance in the Allowance to Reduce Inventory to Market

$

(a2) For the fiscal year ended May 31, 2020, 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)

$