Problem I: (15 pts) Below is information about the products that a company has in its ending inventory. The company will be using the lower of cost or market method (LCM) to determine the inventory valuation for financial statement purposes. Specific cost per unit data for each of its products is as follows: Cost Replacement Cost Selling price Disposal costs Normal profit margin Product #1 $300 240 250 0 70 Product #2 $70 60 100 Product #3 $200 240 250 15 60 30 Product #3 A. Using the information above, complete the following chart: Product #1 Product #2 Ceiling Floor Designated Market Value B. Indicate in the following chart which cost is lower the original "cost" or the designated market value ("DVM"). Also, indicate with a "yes" or "no" whether the company will need to adjust the cost of its inventory down. Product #1 Product #2 Product #3 Which is lower: cost or DMV? Is a write-down necessary? Yes or no? Problem II: (worth 13 points) Takado. Corp. incurred a total loss of its inventory due to fires on the West Coast. Takado lost its inventory on September 1, 2020. The following information is available for 2020: Net sales (1/1/20 - 8/31/20) Inventory-1/1/20 Net purchases (1/1/20-8/31/20) $9,000,000 400,000 6,000,000 .............. The company's gross profit percentage as a percent of sales is consistent from year to year. On its income statement in the prior year, the company noted its net sales amounted to $8,000,000, and its cost of goods sold amounted to $3,200,000. Question: What is the estimated cost of the lost inventory? (8 points) Answer: S (space for calculations is on the next page)