Return to question Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory using the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). The preliminary income statement follows: $ 126,00 $ 11,500 84,000 95,500 21,400 Sates Revenue Cast of Goods Sold Beginning Inventory Purchases Goods Availabye for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (401) Net Income 74,100 51,900 27,500 24,400 9,760 $ 14,640 Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory Item SOU Purchase Cost Replacement Cost per Quantity Per Unit Total Unit 2,350 $ 2.30 $ 5.405 $ 3.30 750 3.00 2,250 1.40 2,800 1.30 3,640 .70 2.350 4.30 10.185 2.30 D Assume that you have been asked to restate the financial statements to incorporate the LCMNRV rule. You have developed the following data relating to the ending Inventory Item A Purchase Cost Replacement Cost per Quantity Per Unit Total Unit 2,350 $ 2.30 $5,405 3.30 750 3.00 2.250 1.40 2,000 1.36 2.640.70 2.350 4.30 10.105 2.30 $ 21,00 C D Required: 1. Restate the income statement to reflect LCMNRV valuation of the ending inventory. Apply LCMNRV on an item-bytem basis 2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement Answer is not complete Complete this question by entering your answers in the tabs below. Beturn to question Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis $ 126,000 SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 Sales Revenue Cost of Goods Sold: Beginning Inventory S 11,500 Purchases B4,000 Goods Available for Sale 95.500 Ending Inventory 21,400 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income 74,100 51,900 27,500 24,400 9.780 14,540 $ Required 2 > 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 income statement in requlrement 1. (Decreases should be indicated by a minus sign.) Item Changed LIFO Cost Basis LCM/NRV Basis Amount of Increase (Decrease) $ $ $ Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income 21,400 74,100 51,900 24,400 9,760 14,640 $ $ $
