30 40 30 Question 2 (10 MARKS) Salvo Company uses the FIFO method of valuating its year-end inventory. The following is the inventory data at year end, December 31, 2020. Inventory Unit Cost Unit Market Commodity Quantity Price Price Aquarius 20 $ 80 $ 92 Capricorn 50 70 65 Leo 8 300 280 Scorpio Taurus 100 90 94 Per accounting requirement for year-end reporting, inventory has to be valued based on the lower of cost or market (LCM) method of the GAAP of Conservatism Principle. Required: 1) Using the lower of cost or market (LCM) valuation method, determine the total inventory value of the above based on item valuation. Show all working. (6 marks) 2) Prepare journal entry to write down the inventory value, if any, for the year. (2 marks) 3) Assume that sales revenue was $118,000 and the cost of goods sold was $72,000 for the year before the write-down of inventory based on LCM method. a) What was the gross profit before the write-down of inventory value? (1 mark) b) What was the gross profit after the write-down of inventory value? (1 mark)