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PB7-2 (Algo) Evaluating the Income Statement and Income Tax Effects of Lower of Cost or...

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PB7-2 (Algo) Evaluating the Income Statement and Income Tax Effects of Lower of Cost or Market/Ne Realizable Value [LO 7-4] Mondetta Clothing prepared its annual financial statements dated December 31. The company used the FIFO inventory costing method, but it failed to evaluate the net realizable value of its ending inventory. The preliminary income statement follows: Assume that you have been asked to restate the financial statements to incorporate LCM/NRV. You have developed the following relating to the ending inventory: 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. 1. Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item bas 2. Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1. Complete this quetion by entering your answers in the tahs below: Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1 . (Decteres shonld be indicated by a minus sign)

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