C. Connect Asser? 3 10 P7-6 Reporting the Statement of Earnings and Cash Flow Effects of Lower of Cost and Not Realizable Value L07-5 Smart Company proved 200 W memoh memade the LCANTYS The 300m Saree Cot of sales Beginning tory Purchases Cost of wate for at Lentory FGC cost of Goprost Operating Pretrage Tocome taxe H" gi films 1297, 532.100 301. 22332 7333 194.114 138, 50 19,136 5.05.02 Assume that you have been used to restore the 2020 Totalement to corporate LCANRV nventory and you have developed the following data relating to the ending inventory at December 31, 2020 Austin Cost tut Matizo If antity Totat Value A 3,22 54.7 115,114 39.10 B 1.678 6.70 11.10 3.22 21,264 5.24 5.29 2 3.370 7.7025949 325,536 2.230 Required: 1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31, 2020, at the LC&NRV. Apply the LC&NRV rule on an item-by-item basis. SMART COMPANY Statement of Earnings (LC&NRV Basis) For the Year Ended December 31, 2020 Cost of sales: 2. Compare and explain the LC&NRV effect on each amount that was changed in part 1 (Negative answers should be indicated by a 2. Compare and explain the LC&NRV effect on each amount that was changed in part 1. (Negative answers should be indicate minus sign.) Item Changed Effect Amount of Chango OK hces 3. This part of the question is not part of your Connect assignment 4-6. What effect (increaso, decrease, no effect) did the LC&NRV rule have on the cash flow for 2020? Increased No effect Decreased