E$7-14$ Reporting Inventory at Lower of Cost or Market$/$Net Reallzable Value

Sandals Company is preparing the annual financial statements dated December $31.$ Ending inven$-$

tory is presently recorded at its total cost of $$5,465.$ Information about its inventory items follows:

Required:

Compute the LCM$/$NRV write$-$down per unit and in total for each item in the table. Also

compute the total overall write$-$down for all items.

How will the write$-$down of inventory to lower of cost or market$/$net realizable value affect

the company's expenses reported for the year ended December $31?$

Compute the amount that should be reported for the inventory on December $31,$ after the

LCM$/$NRV rule has been applied to each item.