Cooperstown Sports, Inc. has four products in its inventory. Information about the December 31, 2013, inventory is as follows:
Total Total Net
Total Replacement Realizable
Product Cost Cost Value
Gloves $360,000 $330,000 $300,000
Bats 260,000 240,000 320,000
Balls 150,000 110,000 125,000
Uniforms 600,000 560,000 950,000
The normal gross profit percentage is 20 percent of cost.
Required:
1. Determine the balance sheet inventory carrying value at December 31, 2013, assuming the LCM rule is applied to individual products.
2. Assuming that Cooperstown recognizes an inventory write-down as a separate income statement item, determine the amount of the loss.