Required:

Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item$-$by$-$item basis.

What will be the effect of the write$-$down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December $31,$ current year?

Complete this question by entering your answers in the tabs below.

Required $1$

Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item$-$by$-$item basis.

$\backslash$table$[[$Item$,$Quantity,Total Cost,$\backslash$table$[[$Total Net$],[$Realizable$],[$Value$]],\backslash$table$[[$Lower of$],[$Cost or NRV$]]],[$A$,38,,,],[$B$,73,,,],[$C$,53,,,],[$D$,28,,,],[,$Total,,,$]]$

Sanchez Company was formed on January $1$ of the current year and is preparing the annual financial statements dated December $31.$ current year. Ending inventory information about the four major items stocked for regular sale follows:

$\backslash$table$[[$Item$,\backslash$table$[[$Quantity$],[$on Hand$]],\backslash$table$[[$Unit cost When$],[$Acquired $($FIFO$)]],\backslash$table$[[$Net Realizable Value$],[($Market$)$ at Year$-$End$]]],[$A$,38,$$$23,$ $$18$

E$7-5($Algo$)$ Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO$7-2$

Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December $31$ of the current year, the accounting records provided the following information for product $1$ :

$\backslash$table$[[$Inventory$,$ December $31,$ prior year,Units,Unit Cost$],[$For the current year:,$1,950,$$$5$