Lower of Cost or Market Shaw Systems sells a limited line of specially made products, using television advertising campaigns in large cities. At year-end, Shaw has the following data for its inventory: Item Number of Historical Cost per Market Value per Units Unit Unit Phone 600 $18 Stereo 180 190 Electric shaver 220 MP3 alarm clock 430 Handheld game 570 system 1. Compute the carrying value of the ending inventory using the lower of cost or market rule applied on an item-by-item basis. Hide Feedback Incorrect Check My Work Feedback Set up a lower of cost or market analysis. Item-by-item - lower of either cost or market goes in LCM column. Compare actual cost of inventory to LCM. If the LCM column is lower, then the inventory account is adjusted. Hide 2. Prepare the journal entry required to value the inventory at lower of cost or market. Cost of Goods Sold Inventory