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: $185,000 Sales Revenue Cost of Goods Sold Beginning Inventory Purchases $ 19,500 109,000 Goods Available for Sale Ending Inventory (FIFO cost) 128,500 29, 250 Cost of Goods Sold 99,250 Gross Profit Operating Expenses 85,750 40,000 Income from Operations Income Tax Expense (30%) 45,750 13,725 Net Income $ 32,025 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 Item Quantity 1,590 840 3,580 1,590 Per Unit $3.00 5.00 3.00 6.00 Total $ 4,770 4,200 10,740 9,540 Current Replacement Cost per Unit (Net Realizable Value) $4.45 2.00 1.00 3.50 $29, 250 Required: 1-a. Restate the income statement to reflect the LC&NRV rule of the ending inventory. SPRINGER ANDERSON GYMNASTICS Income Statement (LC&NRV basis) For the Year Ended December 31 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 Income tax expense Net income 1-b. Apply the lower of cost and net realizable value on an item-by-item basis and show computations. Item LC&NRV Valuation