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: $148,000 Sales Revenue Cost of Goods Sold Beginning Inventory $ 17,000 95,000 Purchases 112,000 27,320 Goods Available for Sale Ending Inventory Cost of Goods Sold Gross Profit Operating Expenses Income from Operations Income Tax Expense (30%) 84,680 63,320 33,000 30, 320 9,096 $ 21,224 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: Purchase Cost Item A B Quantity 1,700 750 3,900 1,700 Per Unit $3.40 4.00 2.40 5.40 Total $ 5,780 3,000 9,360 9, 180 $27,320 Replacement Cost per Unit $4.40 2.40 1.20 3.40 D 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. 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 $ 148,000 Cost of Goods Sold: Beginning Inventory $ 17,000 Purchases 95,000 Goods Available for Sale 112,000 Ending Inventory 27.320 Cost of Goods Sold Gross Profit 84,680 63,320 33,000 30,320 Operating Expenses Income from Operations Income Tax Expense 9,096 $ 21,224 Net Income 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 Basis LCM/NRV Basis Amount of Increase (Decrease) Ending Inventory Cost of Goods Sold Gross Profit Income from Operations Income Tax Expense Net Income