Referring to the situation in P9-2 for Garcia Home Improvement Company, consider the following expanded data at May 31. 2020. Assume Garcia uses LIFO inventory costing. Aluminum siding Cedar shake siding Louvered glass doors Thermal windows Total Instructions Cost Replacement Cost Net Realizable Normal Sales Price Value Profit $ 70,000 $ 62,500 $ 64,000 $ 56,000 $ 5,100 86,000 79,400 94,000 84,800 7,400 112,000 124,000 186,400 168,300 18,500 140,000 126,000 154,800 140,000 15,400 $ 408,000 $ 391,900 $ 499,200 $ 449,100 $ 46,400 (CMA adapted) (a) (1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020. (2) For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market. (1) Calculation of the Allowance to Reduce Inventory to Market account at May 31, 2020: Inventory Item Cost Replacement Cost NRV less normal profit NRV (Ceiling) (Floor) LCM Aluminum siding $ 70,000 $ 62,500 $ 56,000 Cedar shake siding 86,000 79,400 84,800 Louvered glass doors 112,000 124,000 168,300 Thermal windows 140,000 126,000 140,000 Totals $ 408,000 $ 391,900 $ 449,100 Calculation of Allowance balance at May 31, 2020: (2) Calculation of loss to be recorded: (b) Explain the rationale for the use of the lower-of-cost-or-market rule as it applies to inventories.