It is December 31, the end of the year, and the controller of Reed Corporation is applying the lowerof- cost-or-market (LCM) rule to inventories. Before any year-end adjustments, the company reports the following data:

Cost of goods sold........................................... $450,000
Historical cost of ending inventory,
as determined by a physical count ............... 66,000

Reed determines that the net realizable value of ending inventory is $42,000. Show what Reed should report for ending inventory and for cost of goods sold. Identify the financial statement where each item appears.