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: $ 138,000 $ 14,500 90,000 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 (308) Net Income 104,500 24,900 79,600 58,400 30,500 27,900 8,370 $ 19,530 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 A B D Quantity 2,050 700 3,400 Per Unit $2.90 3.50 1.90 4.90 Total $ 5,945 2,450 6,460 10,045 $ 24,900 Replacement Cost per Unit $3.90 1.90 0.95 2.90 2,050 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis. SPRINGER ANDERSON GYMNASTICS Income Statement (LCM/NRV basis) For the Year Ended December 31 Sales Revenue $ 138,000 Cost of Goods Sold: Beginning Inventory $ 14,000 Purchases 90,000 Goods Available for Sale 104,500 24,900 Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense Net Income 79,600 58,400 30,500 27,900 8,370 $ 19,530 1. (Decreases should be indicated by a minus sign.) Item Changed LIFO Cost Basis LCM/NRV Basis Amount of Increase (Decrease) $ (6,400) Ending Inventory $ 24,900 $ 18,500 $ 79,600 Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income