Sandals Company is preparing the annual financial statements dated December 31. Ending inventory information about the four major items stocked for regular sale follows:

Product Line	Quantity on Hand			Unit Cost When Acquire(FIFO)			Market Value at Year-End
Air Flow		35		$	15		$	17
Blister Buster		75			38			36
Coolonite		34			65			60
Dudesly		35			30			35

Required:

1.

Compute the amount that should be reported for the ending inventory using the LCM rule applied to each item.

Ending Inventory

2.

How will the write-down of inventory to lower of cost or market affect the companys expenses reported for the year ended December 31?

Cost of goods sold will be

by