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 $ 138,000 Cost of Goods Sold Beginning Inventory $ 14,500 Purchases 90,000 Goods Available for Sale 104,500 Ending Inventory 24,900 Cost of Goods Sold 79,600 Gross Profit 58,400 Operating Expenses 30,500 Income from Operations 27,900 Income Tax Expense (30%) 8,370 Net Income $ 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 Quantity Per Unit Total Replacement Cost per Unit A 2,050 $ 2.90 $ 5,945 $ 3.90 B 700 3.50 2,450 1.90 C 3,400 1.90 6,460 0.95 D 2,050 4.90 10,045 2.90 $ 24,900 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.