Sanchez Company was formed on January 1 of the current year and is preparing the annual...

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Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Item A B Quantity on Hand 35 ENDING INVENTORY, CURRENT YEAR Unit Cost When Net Realizable Value Acquired (FIFO) (Market) at Year-End 70 $ 20 49 50 60 25 37 $ 15 45 62 32 C D Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV A BCD 35 70 50 25 Total $ 0 $ 0 $ 0 Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Item A B Quantity on Hand 35 ENDING INVENTORY, CURRENT YEAR Unit Cost When Net Realizable Value Acquired (FIFO) (Market) at Year-End 70 $ 20 49 50 60 25 37 $ 15 45 62 32 C D Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV A BCD 35 70 50 25 Total $ 0 $ 0 $ 0