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: $150,000 Sales Revenue Cost of Goods Sold Beginning Inventory $ 17.500 96,880 Purchases 113,500 29.150 84,350 65,650 Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (307) Net Income 33,500 32,150 9.645 $ 22,505 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 Replacement Cost per Unit $4.50 Quantity 1,750 999 4,000 1.750 Per Unit $3.50 4.25 2.50 5.50 Total $ 6,125 3.499 10,000 9.625 1.25 3.50 $29,150 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. 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 $ 150,000 Cost of Goods Sold: Beginning Inventory $17.500 Purchases 98.000 Goods Available for Sale 113,500 Ending Inventory 19.250 Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense 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: $150,000 Sales Revenue Cost of Goods Sold Beginning Inventory $ 17.500 96,000 113,500 29,150 Purchases Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (307) Net Income 84,350 65,650 33,500 32,150 9.645 $ 22,585 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 Tten Quantity 1,750 900 Per Unit $3.50 4.25 2.50 5.50 Replacement Cost per Unit $4.50 2.50 1.25 3.50 Total $ 6,125 3.488 10.ee 9,625 $29,150 4.288 1,750 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compare the LCM/NRV 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 LCMNRV - Basis Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income