Tatum Company has four products in its inventory. Information about the December 31, 2011, inventory is as follows:
The normal gross profit percentage is 25% of cost.
Required:
1. Determine the balance sheet inventory carrying value at December 31, 2011, assuming the LCM rule is applied to individual products.
2. Assuming that Tatum recognizes an inventory write-down as a separate income statement item, determine the amount of the loss.