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 Rev cost of goods sold 13,50 23.00 Purchases Go Anitable for sale Ending nentory cost of Good Sate restroit Operatings Income To Operations Erice tax beeste sut Income 56, 20.5 5,4 Assume that you have been asked to restate the financial statements to incorporate the LOMNAV rule. You have developed the following data relating to the ending inventory er Unit Replacement Coster 2.11 . 3.5 1270 Total $5,00 2.00 5,40 . 300 2.1 12, Required: 1. Restate the income statement to reflect MMR valuation of the ending inventory Apply LOMNRV on an item.ty.combas 2. Compare the LCMNRV effect on each amount that was changed in the prey income statement in tegurement1 Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item ba SPRINGER ANDERSON GYMNASTICS Income Statement (LCMNRV 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 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 Basis LCM/NRV Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Not Income $ 134,000 $ 13,500 88,00 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 101,500 23,800 22.700 56,38e 29,5ee 26, 800 8,840 $ 18,760 Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule Purchase cost Item B Quantity 2,150 700 3,200 2,150 Per Unit $2.70 3.50 1.70 4.70 Total $ 5,805 27450 5,448 10,105 $ 23, Bee Replacement cost per Unit $3.7e 1.70 2.85 2.70