A physical inventory of Liverpool Company taken at December 31 reveals the following. Compute the lower of cost or market for the inventory applied separately to each item. 1. Compute the lower of cost or market for the inventory applied separately to each item. 2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account. Journal entry worksheet Record LCM adjustment. Note: Enter debits before credits