Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows:

The normal gross profit percentage is 25% of total cost.
Required:
1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied to individual products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.

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Total Total Net Reallzable Total Product Value 101 102 103 104 $120,000 90,000 60,000 30,000 $100,000 85,000 40,000 28,000 $100,000 110,000 50,000 50,000