e7-13 lo7-4 reporting inventory at lower of cost or net realizable value 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: images required: 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. (hint: set up columns for item, quantity, total cost, total net realizable value, and lower of cost or nrv.) 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?