P7.5 (Algo) Evaluating the Income Statement and Cash Flow Effects of Lower of Cost or Net Realizable Value LO7-4 Jaffa Cnmpany prepared its annual financial statements dated December 31 of the current year. The company applies the FIFO inven. y 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: Assume thet you have been asked to restate the current year financial statements to incorporate lower of cost or NRV. You have developed following data relating to the current year ending inventory: 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). 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. Note: Round your answers to nearest dollar amount. Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indica Complete this question by entering your answers in the tabs below. Compare the lower of cost or net realizable value effect on each amount that was changed on the income statement in -quirement (1). Note: Decreases should be indicated by a minus sign. Round your answers to nearest dollar amount