Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Quantity Item A on Hand 37 72 BUD ENDING INVENTORY, CURRENT YEAR Unit Cost When Net Realizable Value Acquired (FIFO) (Market) at Year-End $ 22 51 2223 52 27 62 39 $ 17 47 64 34 Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. Item Quantity Total Cost Total Net Realizable Value Lower of Cost or NRV A 37 B 72 C 52 D 27 Total Sanchez Company was formed on January 1 of the current year and is preparing the annual financial statements dated December 31, current year. Ending inventory information about the four major items stocked for regular sale follows: Quantity ENDING INVENTORY, CURRENT YEAR Unit Cost When Net Realizable Value Acquired (FIFO) (Market) at Year-End Item on Hand A 37 B 72 C 52 $ 22 51 62 D 27 39 $ 17 47 64 34 Required: 1. Compute the valuation that should be used for the current year ending inventory using lower of cost or net realizable value applied on an item-by-item basis. 2. What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What will be the effect of the write-down of inventory to lower of cost or net realizable value on cost of goods sold for the year ended December 31, current year? cost of goods sold expense by the amount of the write-down, The write-down to lower of cost or net realizable value will < Required 1 Required 2