2 Compare and explain the LCBNRV effect on each amount that was changed in part 1. (Negative answers should be indicated by a minus sign.) 3. This part of the question is not part of your Connect assignment 4. - What effect (uncrease, decrease, no effect) did the LC\&NRV rule have on the cosh flow for the current year? No effect increosed Decreosed Required: 1. Restate the statement of earnings to reflect the valuation of the ending inventory on December 31 of the current year, at the LC\&NRV Apply the LC\&NRV rule on an item-by-item basis 4-b. What will be the long-term effect on cash flow (increase, decrease, no effect)? Increased No effect. Decreased Smart Company prepared its annual financial statements dated December 31 of the current year. The company applies the FIFO nventory costing method, however, the company neglected to apply the LC\&NRV valuation to the ending inventory. The preliminary tatement of earnings for the current year follows: Assume that you have been asked to restate the financial statements to incorporate the LC\&NRV inventory valuation rule. You have developed the following dato relating to the ending inventory at December 31 of the current year