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 $ 14,000 $ 136,000 89,000 103,000 24,150 78,850 57,150 30,000 27,150 8,145 Income Tax Expense (308) Net Income $ 19,005 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 Item Quantity Per Unit Total Unit A 2,100 $ 2.80 $ 5,880 $ 3.80 B 750 3.00 C D 3,300 2,100 1.80 4.80 2,250 5,940 10,080 1.80 .90 2.80 $ 24,150 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.