Question: Reporting Inventory at Lower of Cost or Market Sandals Company was formed on January 1, 2008, and is preparing the annual financial statements dated December 31, 2008. Ending inventory information about the four major items stocked for regular sale follows:
Required: 1. Compute the amount that should be reported for the 2008 ending inventory using the LCM rule applied to each item.
2. How will the write-down of inventory to lower of cost or market affect the cost of goods sold reported for the year ended December 31, 2008?