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:

$132,000 Sales Revenue Cost of Goods Sold Beginning Inventory S 13,000 87,000 Purchases Goods Available for 00,000 Ending inventory 22,900 (FIFO cost 77,100 Cost of Goods Sold Gross Profit 54,900 Operating Expenses 29,000 Income from 25,900 Income Tax Expense 7,770 Net Income 18,130 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: Purchase Cos Value per Per Total Unit Item Quantity Uni A 2,200 $2.60 s 5,720 S3.60 B 700 3.00 2.100 1.60 3.100 4,960 0.80 D 2,200 4.60 10,120 2.60 $22,900 Required: 1-Restate the income statement to reflect LCM valuation of the ending inventory. Apply LCM on an item-by-item basis. RINGER ANDERSO GYMNASTICS ncome Statement (LCM basis or the Year Ended December 31 Sales Revenue 32,000 Cost of Goods Sold: Beginning inventory $13,000 Purchases 87.000 Goods Available 100.000 Ending Inventory Cost of Goods Gross Profit operating Expenses Net Income 2. Compare the LCM effect on each amount that was changed in requirement 1. Decreases should be indicated by a minus sign.) FIFO LCM Cost Basis Increase Basis Item Changed De creat Cost of Goods Gross profit Net Income