Forest Company has five products in its inventory. Information about ending inventory follows.

Product	Quantity	Unit Cost	Unit Replacement Cost	Unit Selling Price
A	700	$ 21	$ 23	$ 27
B	1,000	26	22	29
C	900	14	13	19
D	600	18	15	17
E	500	25	23	24

The cost to sell for each product consists of a 20 percent sales commission. The normal profit for each product is 40 percent of the selling price.

Required:

1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products.
2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.
3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.