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

	A	B	C	D
1	Item	Units	Cost per Unit	Market per Unit
2
3	Office furniture
4	Desks	536	$261	$305
5	Chairs	395	227	256
6	Mats	687	49	43
7	Bookshelves	421	93	82
8	Filing cabinets
9	Two-drawer	114	81	70
10	Four-drawer	298	135	122
11	Lateral	75	104	118
12	Office equipment
13	Projectors	370	168	200
14	Copiers	475	317	288
15	Phones	302	125	117

Required

1. Compute the lower of cost or market for the inventory applied separately to each item.

Check (1) $580,054

2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.