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: 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 (30%) $ 17,500 $ 150,000 96,000 113,500 29,150 84,350 65,650 33,500 32,150 9,645 Net Income $ 22,505 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 Replacement Cost per Unit Item Quantity Per Unit ABCD 1,750 $ 3.50 $ 6,125 $ 4.50 800 4.25 3,400 2.50 4,000 2.50 10,000 1.25 1,750 5.50 9,625 3.50 $ 29,150 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) Sales Revenue Cost of Goods Sold: For the Year Ended December 31 $ 150,000 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 $ 17,500 96,000 113,500 < Required 1 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.) Item Changed Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income Amount of LIFO Cost Basis LCM/NRY Basis Increase (Decrease)