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: $420,000 $ 45,000 273,000 318,000 66,000 Net Sales Coat 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 (308) Net Income 252,000 168,000 93,000 75,000 22.500 $ 52,500 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: Acquisition Cost Item Quantity Per Unit 3,000 $4.50 1,500 6.00 7.000 3.00 D 3,000 7.50 Total $13,500 9.000 21,000 22,500 $66.000 Net Realizable Value per Unit $6.00 3.00 6.00 4.50 Required: 1. Restate the income statement to reflect LCM/NRV valuation of the ending Inventory. Apply LCM/NRV on an item-by-item basis. 2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending in basis. 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 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compare the LCM/NRV effect on each amount that was changed in the preliminary incor (Decreases should be indicated by a minus sign.) Item Changed FIFO Cost LCM/NRVA BY Amount of Basis Basis Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income 11