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A physical inventory of Liverpool Company taken at December 31 reveals the following. Item Units Per Unit Cost Market Car audio equipment Speakers 341 $

A physical inventory of Liverpool Company taken at December 31 reveals the following.

Item Units Per Unit
Cost Market
Car audio equipment
Speakers 341 $ 96 $ 104
Stereos 256 117 106
Amplifiers 322 92 101
Subwoofers 200 58 47
Security equipment
Alarms 476 156 131
Locks 287 99 90
Cameras 208 316 328
Binocular equipment
Tripods 181 76 90
Stabilizers 166 103 111

Required:

  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.

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