Ayayai Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2020. Jim Alcide, controller for Ayayai, has gathered the following data concerning inventory.

At May 31, 2017, the balance in Ayayai’s Raw Materials Inventory account was $448,800, and Allowance to Reduce Inventory to NRV had a credit balance of $29,690. Alcide summarized the relevant inventory cost and market data at May 31, 2017, in the schedule below.

Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Ayayai’s May 31, 2020, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing.

Cost Replacement Cost Sales Price Net Realizable Value Normal Profit

Aluminum siding $77,000 $68,750 $70,400 $61,600 $5,610
Cedar shake siding 94,600 87,340 103,400 93,280 8,140
Louvered glass doors 123,200 136,400 205,040 185,130 20,350
Thermal windows 154,000 138,600 170,280 154,000 16,940
Total $448,800 $431,090 $549,120 $494,010 $51,040

Required:
a. Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020.
b. For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market.