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.

Compare and explain the LC&NRV effect on each amount that was changed in part 1.

Thankyou!

Smart Company prepared its annual financial statements dated December 31, 2020. The company applies the FIFO Inventory costing method, however, the company neglected to apply the LC&NRV valuation to the ending inventory. The preliminary 2020 statement of earnings follows: 5283,000 ces $ 31,300 187,000 210,300 51,456 Sales revenue cost of wales Beginning inventory Purchase cost of goods available for sale Ending Inventory (PIYO cost) cont of sales Grons profit Operating expenses Protax earnings Income tax expense (409) Net cornings 116,156 62,300 53,856 21,542 $ 32,314 Assume that you have been asked to restate the 2020 financial statements to incorporate the LC&NRV inventory valuation rule. You have developed the following data relating to the ending inventory at December 31, 2020: Acquisition Cost Net Mealizable Value $6.30 3.80 ItemQuantity Unit Total A 3,080 53.30 $10,164 1.530 5. 109 7.130 1.80 12.834 D 3.230 6.30 20,349 $51,456 CU 3.80 4.30 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 Basin) For the Year Ended December 31, 2020 Cost of sales 0 0 $ 0 2. Compare and explain the LC&NRV effect on cach amount that was changed in part 1. (Negative answers should be Indicated by a minus sign.) Item Changed Effect Amount of Change