Please show the answers for these steps, if possible please explain when we use the LCM/NRV per unit vs using the regular cost of sale price. Please reply to comments quick and I will give thumbs up as I want to finish this tonight.

P7-6 Reporting the Statement of Earnings and Cash Flow Effects of Lower of Cost and Net Realizable Value LO7-5 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: $293,000 $ 32,300 197,000 229,300 68,496 Sales revenue Cost of sales Beginning inventory Purchases Cost of goods available for sale Ending inventory (FIFO cost) Cost of sales Gross profit Operating expenses Pretax earnings Income tax expense (30%) Net earnings 160,804 132,196 63,300 68,896 20,669 $ 48,227 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: 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 Item A Net Realizable Value $5.30 4.80 4.80 5.30 Quantity Unit Total 3,180 $4.30 $13,674 1,630 6.30 10,269 7,230 2.80 20, 244 3,330 7.30 24,309 $68,496 MUA D 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. 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. X Answer is not complete. SMART COMPANY Statement of Earnings (LC&NRV Basis) For the Year Ended December 31, 2020 Sales revenue Cost of sales: Beginning inventory Purchases Cost of goods available for sale Ending inventory Cost of sales x 0 0 Gross profit Operating expense Pretax earnings Income tax expense Net earnings 00000 0 $ 0 2. Compare and explain the LC&NRV effect on each amount that was changed in part 1. (Negative answers should be indicated by a minus sign.) Item Changed Effect Amount of Change 3. This part of the question is not part of your Connect assignment. 4-a. What effect (increase, decrease, no effect) did the LC&NRV rule have on the cash flow for 2020? No effect Decreased Increased 4-b. What will be the long-term effect on cash flow (increase, decrease, no effect)? 0 0 0 Decreased Increased No effect