Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows:

Required:
1. Compute the amount that should be reported for the Ending inventory using the LCM rule applied to each item.
2. How will the write-down of inventory to lower of cost or market affect the company€™s expenses reported for the year ended December 31?

Transcribed Image Text:

Quantity on Hand 20 75 35 10 Unit Cost When Product Line Air Flow Blister Buster Coolonite Dudesly Market Value at Year-End $14 38 50 35 $12 40 30