Tumbell Corp. (Tumbell) reports its inventory at the lower of cost and net realizable value. Tumbell has five inventory categories. You are provided with the following cost and NRV information about each category:

Required:
a. What amount should Tumbell report on its balance sheet for inventory? Assume Tumbell applies the lower of cost and NRV rule on an item-by-item basis.
b. What is the amount of writedown that is required?
c. Record any journal entries required to account for thewritedown.

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Net realizable value Inventory category Category 1 Category 2 Category 3 Category 4 Category 5 Total Cost $168,000 346,500 111,750 147,150 220,500 $187,500 322,500 112,800 117,750 228,000 $968 550