Jaffa Company prepared its annual financial statements dated December 31 of the current year. The company applies 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 (30%) Net income Item A B C D Quantity 3,080 1,530 7,130 3,230 $33,300 187,000 220,300 51,456 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 Total $10,164 Unit $3.30 5.30 1.80 6.30 $283,000 8,109 12,834 20,349 $51,456 168,844 114, 156 62,300 51,856 15,557 $36,299 Net Realizable Value Per Unit $4.30 3.80 3.80 4.30 Required: 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the current year ending inventory. Apply lower of cost or NRV on an item-by-item basis. 2. Compare the lower of cost or net realizable value effect on each amount that was changed on the income statement in requirement (1). Complete this question by entering your answers in the tabs below.

Jaffa Company prepared its annual financial statements dated December 31 of the current year. The company applies 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: 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: Required: 1. Prepare the income statement to reflect lower of cost or net realizable value valuatioh of the current year ending inventory. Apply lower of cost or NRV on an item by -item bosis. 2. Compare the lower of cost or net realizoble value effect on each amount that was changed on the income statement in requirement (i). 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the current year ending inventory. Apply lower of cost or NRV on an item-by-item basis. 2. Compare the lower of cost or net realizable value effect on each amount that was changed on the income statement in requirement (1). Complete this question by entering your answers in the tabs below. Prepare the income statement to reflect lower of cost or net realizable value valuation of the current year ending inventory. Apply lower of cost or NRV on an item-by-ttem basis. (Round your answers to nearest dollar amount.) Compare the lower of cost or net realizable value effect on each amount that was changed on the income requirement (1). (Decreases should be indicated by a minus sign. Round your answers to nearest dollar am Jaffa Company prepared its annual financial statements dated December 31 of the current year. The company applies 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: 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 imventory: Required: 1. Prepare the income statement to reflect lower of cost or net realizable value valuation of the current year ending inventory. Apply lower of cost or NRV on an item-by-item basis. 2. Compare the lower of cost or net realizable value effect on each amount that was changed on the income statement in requirement (7)