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: Sales Revenue $ 170,000 Cost of Goods Sold Beginning Inventory $ 18,000 Purchases 103,000 Goods Available for Sale 121,000 Ending Inventory (FIFO cost) 34,220 Cost of Goods Sold 86,780 Gross Profit 83,220 Operating Expenses 37,000 Income from Operations 46,220 Income Tax Expense (30%) 13,866 Net Income $ 32,354 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 Cost Current Replacement Cost per Unit (Net Realizable Value) Item Quantity Per Unit Total A 1,560 $ 3.00 $ 4,680 $ 4.30 B 810 3.00 2,430 1.00 C 3,550 5.00 17,750 3.50 D 1,560 6.00 9,360 4.00 $ 34,220 Required: 1-a. Restate the income statement to reflect the LC&NRV rule of the ending inventory. 1-b. Apply the lower of cost and net realizable value on an item-by-item basis and show computations.