Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 600 $ 30 $ 32 $ 36 B 1,000 35 31 38 C 900 23 22 28 D 800 27 24 26 E 700 34 32 33
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
| Product | Quantity | Unit Cost |
Unit Replacement Cost |
Unit Selling Price |
||||||||||
| A | 600 | $ | 30 | $ | 32 | $ | 36 | |||||||
| B | 1,000 | 35 | 31 | 38 | ||||||||||
| C | 900 | 23 | 22 | 28 | ||||||||||
| D | 800 | 27 | 24 | 26 | ||||||||||
| E | 700 | 34 | 32 | 33 | ||||||||||
The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 25 percent of the selling price.
Required:
1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products.
2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory.
3. Assuming inventory write-downs are common for Forester, record any necessary year-end
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