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Martinez Home Improvement Company installs replacement siding, windows, and louvered glass doors for single$-$family homes and

condominium complexas. The company is in the process of preparing its annual financial statements for the fiscal year ended May $31,$

Jim Aleide, controller for Martinez, has pathered the following data concerning inventory.

At May $31,2020,$ the balance in Martinez's Raw Materials Imventory account was $$510,000,$ and Allowance to Reduce Imvantory to

Market had a credit balance of $$29,590.$ Alcide summarized the relevant inwentory coat and markat data at May $31,2020,$ in the

schedule balow.

Alcide assigned Patricia Deveraaux, an intern from a local college, the task of calculating the amount that should appear on Martiner's

May $31,2020,$ financial statements for imventory at lower$-$of$-$cost$-$or$-$markat as applied to aach item in imentory. Devarsaux

eopressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing.

$($a$1)$ Datermine the proper balance in Allowance to Reduce Inventory to Market at May $31,2020.$

Balance in the Allowance to Reduce Imentory to Market $

$($a$2)$ For the fiscal year andad May $31,2020,$ datermine the amount of the gain or loss that would be recordad due to the change in

Allowance to Reduce Inventory to Market.

The amount of the gain $[$loss$]$ $

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