Jaffa Company prepared its annual financial statements dated December 31 of the current year. The FIFO inventory costing method; however, the company neglected to apply lower of cost or net realizable value to the ending inventory. The preliminary current year income statement follows: Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale. Ending inventory (FIFO cost) Cost of goods sold Gross profit Operating expenses Pretax income Income tax expense (40%) Net income $282,000 $ 33,200 186,000 219,200 49,796 169,404 112,596 62,200 50,396 20, 158 $ 30,238 Assume that you have been asked to restate the current year financial statements to incorporate lower of cost or NRV. You have developed the following data relating to the current year ending inventory: Acquisition Cost Item Quantity Unit Total Net Realizable Value Per Unit A 3,070 $3.20 $ 9,824 $4.20 B 1,520 5.20 7,904 3.70 C 7,120 1.70 12,104 3.70 D 3,220 6.20 19,964 4.20 $49,796 JAFFA COMPANY Income Statement (Corrected) For the Year Ended December 31, Current Year Cost of goods sold: Goods available for sale 0 Cost of goods sold Pretax income 2. Compare the lower of cost or net realizable value effect on each amount that was changed on the income statement in requirement (1). (Decreases should be indicated by a minus sign.)(Round your answers to nearest dollar amount.) Amount of Item Changed FIFO Cost Basis Lower of Cost or NRV Change (Decrease) Ending inventory Cost of goods sold Gross profit Pretax income Income tax expense Net income