Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory usin 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 Sales Revenue Cost of Goods Sold $146,000 Beginning Inventory $ 16,500 94,000 Purchases Goods Available for Sale 110,500 25,730 Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (40%) Net Income 84,770 61,230 32,500 28,730 11,492 $ 17,238 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: Purchase Cost Replacement Cost per Unit $4.30 2.30 1.15 3.30 Item Quantity 1,650 700 3,800 1,650 Per Unit $3.30 4.00 2.30 5.30 Total $ 5,445 2,800 8,740 8,745 $25,730 Required 1. Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis 2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1