Mondetta Clothing prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to evaluate the net realizable value of its ending inventory. The preliminary income statement follows: Net Sales $ 436,000 Cost of Goods Sold Beginning Inventory $ 49,000 Purchases 281,888 Goods Available for Sale 330,000 Ending Inventory 95,760 Cost of Goods Sold 234, 240 Gross Profit 201,760 Operating Expenses 97.000 Income from Operations w 164,760 Income Tax Expense (38%) 31,428 Net Income $ 73,332 Assume that you have been asked to restate the financial statements to incorporate LCM/NRV. You have developed the following data relating to the ending inventory Item A B Net Acquisition Cost Realizable Value per Per Unit Total Unit $ 5.30 $ 20,140 $ 6.80 7.68 14,440 3.80 3.80 29,640 6.80 8.30 31,540 5.30 $ 95,768 Quantity 3,880 1,980 7,888 3,860 nuo D Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of t MONDETTA CLOTHING Income Statement (LCM/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 Profit Operating Expenses Income from Operations Income Tax Expense Net Income Required 1 Required 2 Compare the LCM/NRV effect on each amount that was changed in the prelim (Decreases should be indicated by a minus sign.) Item Changed FIFO Cost Basis LCNHNRV Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income