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 $ 120,000 $ 10,000 81,000 91,000 18,800 72,200 47,800 26,000 21,800 6,540 Income Tax Expense (30%) Net Income $ 15,260 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 Unit Item Quantity Per Unit A 2,500 $ 2.00 Total $ 5,000 $ 3.00 B 650 2.00 1,300 C 2,500 1.00 2,500 1.00 .50 D 2,500 4.00 10,000 2.00 $ 18,800 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 $ 120,000 $ 10,000 81,000 91,000 18,800 72,200 47,800 26,000 21,800 6,540 Income Tax Expense (30%) Net Income $ 15,260 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 Unit Item Quantity Per Unit A 2,500 $ 2.00 Total $ 5,000 $ 3.00 B 650 2.00 1,300 C 2,500 1.00 2,500 1.00 .50 D 2,500 4.00 10,000 2.00 $ 18,800