P7-6 Reporting the Statement of Earnings and Cash Flow Effects of Lower of Cost and Net Realizable Value LO7.5 Simart Company prepared its annual financial statements dated December 31.2020 the company opplies the FIFO imventory costing method; however, the company neglected to apply the LCRNRV valuation to the ending inventory. The prefininary 2020 staterient of carnings follows: Assume that you have been asked to restate the 2020 financial statements to incorporate the LCSNRV inventory valuation rule. You have developed the following data relating to the ending inventory at December 31,2020 Required: 1. Restate the statement of eamings to reflect the valuation of the ending irwentory on December 3t, 2020, at the LCSNRV Apply une LC\&NRV rule on an item by -item basis. 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. 2. Compare and explain the LC8NRV effect on each amount that was changed in part I. (Negative answers should be indicated by a minus sign. 3. This part of the question is not part at your Connect asskgnment. 4. What effect (increase decrease no effect) did the LC8NRV rule tuve an the cash flow tor 2020