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: $ 158,000 Sales Revenue Cost of Goods Sold Beginning Inventory $ 19,500 100,000 Purchases 119,500 35,270 u Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income 84,230 73,770 35,500 38,270 11,481 $ 26,789 nces 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 Item Quantity 1,950 800 4,400 1,950 Per Unit $3.90 4.25 2.90 5.90 Total $ 7,605 3,400 12,760 11,505 $35,270 Replacement Cost per Unit $4.90 2.90 1.45 3.90 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