PA7-2 Evaluating the Income Statement and Income Tax Effects of Lower of Cost or Market [LO 7-4] Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply LCM to the ending inventory. The preliminary income statement follows Sales Revenue Cost of Goods Sold $156,000 Beginning Inventory Purchases $ 19,000 99,000 Goods Available for Sale Ending Inventory (FIFO cost) 118,000 33,580 Cost of Goods Sold 84,420 Gross Profit Operating Expenses 71,580 35,000 Income from Operations 36,580 10,974 Income Tax Expense (30%) Net Income S 25,606 Assume that you have been asked to restate the financial statements to incorporate LCM. You have developed the following data relating to the ending inventory Market Value Purchase Cost per Unit Item Quantity Per UnitTotal 1,900 S3.80 4.00 2.80 5.80 $4.80 825 4,300 1,900 7,220 3,300 12,040 11,020 2.80 1.40 3.80 S33,580