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 Revenge $ 157,000 Cost of Goods Sold Beginning Loventory 518,000 Purchases 92.000 Goods Available for Sale 115,000 Ending Inventory 30, 420 Cost of Goods Sold 84580 Gross Profit 67,420 Operating Expenses 34,000 Income from Operations 33,420 Income Tax Expense (30) 10.025 Net Income 5 25,394 Assume that you have been asked to testate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory Iten . C 0 Quantity 1,500 100 4.100 1.000 Purchase Cost Replacement Cost per Per Unit Total Unit $ 3.60 $ 6,450 $4.60 4.00 3,200 2.60 2.60 10,660 1.30 5.60 10.ete 3.60 $ 30,420 Required: 1. Restate the income statement to reflect LCMNRV 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 is requirement Complete this question by entering your answers in the tabs below. Required 1 Required Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCMV on an item-by-item basis SPRINGER ANDERSON GYMNASTICS Income Statement (LCMANRV basis) For the Year Ended December 31 Sales Revenge Cost of Goods Sold Beginning inventory Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Pro Operating Expenses Income from Operation Income Tax Exe Net Income 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 5 152,000 Cost of Goods Sold Beginning Inventory $ 18,000 Purchases 97.000 Goods Available for Sale 115,000 Ending Inventory 30.420 Cost of Goods Sold 114,580 Gross Profit 67,420 Operating Expenses 30.000 Income froe Operations 33,420 Income Tax Expense (0) 10.026 Net Income $ 23,394 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 Item A Quantity 1.800 100 4,100 1,500 Purchase Cost Replacement Cost per Per Unit Total Unit $ 3.60 5 6,4305 4.60 4.00 3,200 2.60 2.50 10,660 1.30 5.60 10.00 $ 30,420 0 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 requirement1 Complete this question by entering your answers in the tabs below. Required 1 Hequired 2 Compare the LCM/RV 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 LIFO Cost Basis LCMNRV Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Cross Profit Income from Operations Income Tax Expen Net Inco
