E6-2 Kale Thompson, an auditor with Sneed CPAs, is performing a review of Strawser Company's inventory account.

E6-2Kale Thompson, an auditor with Sneed CPAs, is performing a review of Strawser Company's inventory account. Strawser did not have a good year and top management is under pressure to boost reported income. According to its records, the inventory balance at year-end was $740,000. However, the following information was not considered when determining that amount.