Sheridan Distribution Co. has determined its December 31, 2020 inventory on a LIFO basis at $1025000. Information pertaining to that inventory follows: Estimated selling price $1070000 Estimated cost of disposal 45000 Normal profit margin 125000 Current replacement cost 945000

Sheridan records losses that result from applying the lower-of-cost-or-market rule. At December 31, 2020, the loss that Sheridan should recognize is

$125000.

$0.

$80000.

$45000.