Jaffa Company prepared its annual financial statements dated December 31 of the current year. The company apples 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 i Ending Inventory (FIFO cost) Cost of goods sold Gross profit Operating expenses Pretax income Income tax expense (40%) Net Incone $297,000 $ 34,700 201,000 235,700 68,521 167,179 129,21 63,700 66,121 26,448 $39,673 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 3,220 $4.70 $ 15,134 1,670 4.20 7,014 C 7,270 4.20 30,534 D 3,370 4.78 15,839 $3.70 5.70 2:20 6.70 $68,52 Required: 1. Prepare the income statement to reflect lower of cost or net realzable value valuation of the current year ending inventory. Apply lower of cost or NRV on an item-by-tem basis. (Round your answers to nearest dollar amount) Answer is complete but not entirely correct. JAFFA COMPANY Income Statement (Corrected] For the Year Ended December 31, Current Year Sales revenue Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold Gross profe Operating expenses Pretax income income tax expense Net income 0 297,000 00 34.700 201,000 235.700 0 68.621 162,179 O 120821 O 00 0 13 0 03700 O 0 121 O 26.440 O 30.873 O