Problem $9-3($Static$)$ Lower of cost or market; by product and by total inventory $[$LO$9-1]$

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

Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price

A $1,000$ $ $10$ $ $12$ $ $16$

B $800151118$

C $600328$

D $200746$

E $600141213$

The cost to sell for each product consists of a $15$ percent sales commission. The normal profit for each product is $40$ percent of the selling price.

Required:

Determine the carrying value of ending inventory, assuming the lower of cost or market $($LCM$)$ rule is applied to individual products.

Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.

Assuming inventory write$-$downs are common for Forest, record any necessary year$-$end adjusting entry based on the amount calculated in requirement $2.$