Problem $5$: $[20$ minutes, $10$ marks$]$

Thompson Distributors uses a perpetual inventory system and has the following data available for inventory, purchases, and sales for a recent year:

Compute the cost of goods available for sale. $[1$ mark$]$

$\frac{2}{110}+575+680+230=1595$

$8$ Compute the cost of ending inventory and the cost of goods sold using the specific identification method. Assume the ending inventory is made up of $40$ units from beginning inventory, $30$ units from purchase $1,80$ units from purchase $2,$ and $40$ units from purchase $3.[2$ marks$]40$

An inventory count took place at the end of the year, and indicated that $190$ units are left on hand. Compute the cost of ending inventory and the cost of goods sold using the FIFO inventory costing method. $[2$ marks$]$

If the company uses FIFO and the Net Realizable Value of ending inventory is $$6\mathrm{.}00$ per unit, is a write$-$down of inventory necessary? Why or why not? $[1$ mark$]$

If a write$-$down is necessary, calculate how much this write$-$down would be for and then record the necessary journal entry, $[2$ marks$]$

What is the conceptual justification for valuing inventory at the lower of cost and net realizable value? $[2$ marks$]$