Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to apply the LC&NRV to the ending inventory. The preliminary income statement is as follows: $140,000 $ 15,000 91,000 Sales Revenue Cont of Goods Sold Beginning Inventory Purchases Goods Available for sale Ending Inventory (FIFO cost) cost of Goods sold 106.000 22,000 84,000 Grans Profit Operating Expenses 56,000 31,000 25.000 7.500 Income from Operation Income Tax Expense (3001 Het Income $ 17,500 Assume that you have been asked to restate the financial statements to incorporate the LC&NRV. You have developed the following data relating to the ending inventory: Purchase Cout Current Replacement Cost per unit (Net Item Quantity Por unit Total Realizable Value) 1.500 53 $4,500 $4 750 4 2.000 2 3,500 2 7.000 1,500 5 7,500 c $22,000 Required: 1-a. Restate the income statement to reflect the LC&NRV rule of the ending inventory. SPRINGER ANDERSON GYMNASTICS Income Statement (LC&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 Not income 1-b. Apply the lower of cost and net realizable value on an item-by-item basis and show computations, tum LCENRV Valuation B