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Ivanhoe 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

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Ivanhoe 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 Ivanhoe, has gathered the following data concerning inventory. At May 31, 2020, the balance in Ivanhoe's Raw Materials Inventory account was $489,600, and Allowance to Reduce Inventory to Market had a credit balance of $29,890. 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 Ivanhoe's 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 Sales Price Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total $84,000 103,200 134,400 168,000 $489,600 Replacement Cost $75,000 95,280 148,800 151,200 $470,280 $76,800 112,800 223,680 185,760 $599,040 Net Realizable Value $67,200 101,760 201,960 168,000 $538,920 Normal Profit $6,120 8,880 22,200 18,480 $55,680 (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) $

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