Question - Lower of cost and net realizable value

Tatum Company has four products in its inventory. Information about the December 31, 2016, inventory is as follows:

Product                   Total Costs          Total net realizable value

101                         $ 156,000             118,000      

102                         $ 108,000             128,000

103                         78,000                   68,000

104                         48,000                   68,000

Required:

1. Determine the book value of inventory at December 31, 2016, assuming the lower of cost and net realizable value rule is applied to individual products.

2. Assuming that Tatum reports an inventory write-down as a line item in the income statement, determine the amount of the loss.