Treasury Wine faces class action over US disclosure Treasury Wine Estates, the world’s largest pure-play winemaker, shocked markets and investors in July when it admitted an oversupply of poor and unwanted wine in the United States would trigger a $160 million write down and include a $35 million charge to destroy past-its-date wine stocks.
The profit warning and write-off saw Treasury Wine Estates shares plunge more than 12 percent and later led to the ejection of its chief executive, David Dearie.

1. What would be the journal entry for the write-downs?
2. Why would a write-down in inventory lead to a decline in share price?