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 $120,000 Sales Revenue Cost of Goods Sold $10,000 81,000 Beginning Inventory Purchases Goods Available for Sale 91,000 18,800 Ending Inventory 72,200 47,800 26,000 21,800 6,540 $15,260 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income 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 Total $ 5,000 1,300 2,500 10,000 $18,800 Replacement Cost per Unit $3.00 1.00 0.50 2.00 Item Quantity 2,500 650 2,500 2,500 Per Unit $2.00 2.00 1.00 4.00 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 Complete this question by entering your answers in the tabs below. 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 SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 Sales Revenue Cost of Goods Sold: Beginning Inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income Required 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 requirement 1. (Decreases should be indicated by a minus sign.) LIFO Cost LCMINRV Amount of Increase Item Changed Basis (Decrease) Basis Ending Inventory Cost of Goods Sold Gross Profit Income from Operations ncome Tax Expense Net Income Required 1 Required 2