Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows:

Product Total Cost Total Net Realizable Value

101 $120,000 $100,000

102 90,000 110,000

103 60,000 50,000

104 30,000 50,000

Required:

1.Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied to individual products.

2.Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.