Home Stop sells two product categories, furniture and accessories. Information pertaining to its year-end inventory is as follows:

Inventory, by Product CategoryQuantityPer Unit CostMarketFurniture: Chairs70$ 34$ 40Desks408267Tables6093101Accessories: Rugs306957Lamps503127

Required:

1. Determine the carrying value of inventory at year-end, assuming the lower of cost or market (LCM) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.
2. Assuming inventory write-downs are common for Home Stop, record any necessary year-end adjusting entry for each of the LCM applications in requirement 1.