Mondetta Clothing prepared its annual financial statements dated December 31. The company used the FIFO inventory osting method, but it failed to evaluate the net realizable value of its ending inventory. The preliminary income statement follows: $436,000 Net Sales Cost of Goods Sold 49,000 281,000 330,000 95,760 Beginning Inventory Purchases Goods Available for Sale Ending Inventory 234,240 201,760 97,000 104,760 31,428 $ 73,332 Cost of Goods Sold Gross Profit Operating Expenaes Income fron Operations Income Tax Expense (308) Net Income Assume that you have been asked to restate the financial statements to incorporate LCM/NRV. You have de relating to the ending inventory veloped the following dia equinition Coat Net Realizable Value per Unit $6.80 Item Ouantity Per Unit Total 3,800 $5.30 $20,140 1,900 7.60 14,440 7,800 3.8029,640 3,800 8.30 31.5405.30 3.80 6.80 $95,760 Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis. MONDETTA CLOTHING Income Statement (LC/NRV basis) For the Year Ended December 31 Net Sales Cost of Goods Sold: Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Proft Operating Expenses Income from Operations Income Tax Expense Net Income Required 2 > Required 1 Required 2 Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1. (Decreases should be indicated by a minus sign.) FIFO Cost LCMNRV Amount Item Changed Basis Basis Increase Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income Required 1