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 5284,000 $ 31,400 100.000 219,400 53,124 sales revenue cost of sales Beginning inventory Purchases Cost of goods available for sale Ending Inventory (PITO coat) Coat of sales Grone profit Operating expenses Pretax earning Income tax expense (301) Net earnings 165,276 117.724 52,400 55.324 16.597 5.31,727 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 Realisable Iten Quantity Unit Total Value 3,090 $3.40 310,506 $4.40 1,560 3,316 7.140 1.90 13,566 3.90 3,240 6.40 20.736 $53,124 A 3.90 C D 4.40 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 0 0 $ O 2. Compare and exploin the LC&NRV effect on each amount that was changed in part 1. (Negative answers should be indicated by minus sign) Item Changed Effect Amount of Change