Tatum Company has four products in its inventory. Information about the December 31, 2018, inventory is as follows:
|product||total cost||total replacement cost||total net realizable value|
* The normal gross profit percentage is 25% of total cost
1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Assuming that inventory write-downs are common for Tatum Company, record any necessary year-end adjusting entry.