Jones Inc. has the following five items in its ending inventory:

Item Cost Estimated Estimated

Selling Price Selling Costs

Umbrellas $ 3,400 $6,000 $ 50

Tables 4,000 3,800 50

Chairs 6,500 6,000 50

Pergolas 6,000 6,500 50

Firepits 5,000 8,000 50

Total $24,900 $ 30,300 $ 250

Required:

Using the Lower of Cost and Net Realizable Value model determine the value to be reported as ending inventory under the following assumptions:

1. Lower of Cost and Net Realizable Value is applied to inventory on an item-by-item basis.
2. Lower of Cost and Net Realizable Value is applied to inventory value as a whole.