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Question - 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 net realizable value (LCNRV) rule is applied to individual products.
2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.
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