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:

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 $(30\%)$

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:

Required:

Restate the income statement to reflect LCM$/$NRV valuation of the ending inventory. Apply LCM$/$NRV on an item$-$by$-$item basis.

Compare the LCM$/$NRV effect on each amount that was changed in the preliminary income statement in requirement $1.$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:

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 $(30\%)$

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:

Required:

Restate the income statement to reflect LCM$/$NRV valuation of the ending inventory. Apply LCM$/$NRV on an item$-$by$-$item basis.

Compare the LCM$/$NRV effect on each amount that was changed in the preliminary income statement in requirement $1.$