Emart Company prepared its annual financial statements dated December $31$ of the current year. The company applies the FIFO

inventory costing method; however, the company neglected to apply the LC&NRV valuation to the ending inventory. The preliminary

statement of earnings for the current year follows:

Assume that you have been asked to restate the financial statements to incorporate the LC&NRV inventory valuation rule. You have

developed the following data relating to the ending inventory at December $31$ of the current year:

Requlred:

Restate the statement of earnings to reflect the valuation of the ending inventory on December $31$ of the current year, at the LC&NRV$.$

Apply the LC&NRV rule on an item$-$by$-$item basis.

Compare and explain the LC&NRV effect on each amount that was changed in part $1.($Negotlve answers should be Indlcated by a

minus sign.$)$