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Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its...

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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 balles Revenue $138, 000 Cost of Goods Sold $ 14, 500 90, 000 Beginning Inventory Purchases 104, 500 24, 900 Goods Available for Sale Ending Inventory 79, 600 58, 400 30, 500 27, 900 8, 370 $19, 530 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: Pur chase Cost Total $5, 945 2, 450 6, 460 10, 045 $24, 900 Replacement Cost per Unit $3.90 1.90 0.95 2.90 Item Quantity 2, 050 700 3, 400 2, 050 Per Uhit $2.90 3. 50 1.90 4.90 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

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