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 800 $ 27 $ 29 $ 33 B 800 32 28 35 C 600 20 19 25 D 800 24 21 23 E 500 31 29 30 The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 35 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 adjusting entry based on the amount calculated in requirement 2.