Required:1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31, 2020, at the LC&NRV. Apply theLC&NRV rule on an item-by-item basis.Sales revenueCost of sales:Beginning inventoryPurchasesCost of goods available for saleEnding inventoryCost of salesGross profitOperating expensePretax earningsIncome tax expenseSMART COMPANYStatement of Earnings (LC&NRV Basis)For the Year Ended December 31, 2020Net earnings32,300197,000229,300$293,000293,000293,000293,000 Smart Company prepared its annual financial statements dated December 31, 2020. The company applies the FIFO inventory costingmethod; however, the company neglected to apply the LC&NRV valuation to the ending inventory. The preliminary 2020 statement ofearnings follows:Sales revenueCost of salesBeginning inventoryPurchasesCost of goods available for saleEnding inventory (FIFO cost)Cost of salesGross profitOperating expensesPretax earningsIncome tax expense (30%)Net earningsItem QuantityABCDAssume that you have been asked to restate the 2020 financial statements to incorporate the LC&NRV inventory valuation rule. Youhave developed the following data relating to the ending inventory at December 31, 2020:AcquisitionCostUnitTotal3,180 $4.30 $13,67410,2691,630 6.307,230 2.803,330 7.3020,24424,309$68,496$ 32,300197,000229,30068,496Net RealizableValue$5.304.804.805.30$293,000160,804132, 19663,30068,89620,669$ 48,227

Name: Required:1. Restate the statement of earnings to reflect the valuatio
Uploaded: 2024-03-20T06:32:37.000Z
Channel: Bartleby
Description: Required:1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31, 2020, at the LC&NRV. Apply theLC&NRV rule on an item-by-item basis.Sales revenueCost of sales:Beginning inventoryPurchasesCost of goods av