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 follow:s $130,000 Sales Revenue Cost of Goods Sold Beginning Inventory $12,500 86,000 Purchases Goods Available for Sale 98,500 22,350 Ending Inventory 76,150 53,850 28,500 25,350 7,605 $17,745 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) Net Income 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 $3.50 1.50 0.75 2.50 Item Quantity 2,250 700 3,000 2,250 Per Unit $2.50 3.00 1.50 4.50 Total $ 5,625 2,100 4,500 10,125 $22,350 A. 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