IBM Data for the year ended December 31, 2023:

Item	Amount
Inventory Cost	$5,000,000
Market Value of Inventory	$4,500,000
Sales	$30,000,000
Cost of Goods Sold	$18,000,000
Operating Expenses	$7,000,000

1. Calculate the amount of inventory to be reported on the balance sheet.
2. Determine the impact on net income due to the write-down of inventory.
3. Discuss the impact of inventory write-down on IBM’s operating income.
4. Explain the application of the Conservatism Principle in inventory valuation.
5. How should IBM record the inventory write-down in its financial statements?