A food processing company, Nestl, reports the following data for the year ended December 31, 2023: Inventory cost: $1,500,000 Market value of inventory: $1,300,000 Sales:

A food processing company, Nestlé, reports the following data for the year ended December 31, 2023:

• Inventory cost: $1,500,000
• Market value of inventory: $1,300,000
• Sales: $6,000,000
• Cost of Goods Sold: $4,000,000
• Operating Expenses: $1,200,000
• Calculate the amount of inventory to be reported on the balance sheet.
• Determine the impact on net income due to the write-down of inventory.
• How would the financial statements be affected if the inventory was reported at cost?
• Discuss the application of the Conservatism Principle in inventory valuation.
• How should the company record the inventory write-down?