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Forester Company has five products in its inventory. Information about the December 31, 2018, inventory follows....

Forester Company has five products in its inventory. Information about the December 31, 2018, inventory follows. Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price A 1,000 $ 28 $ 30 $ 34 B 900 33 29 36 C 500 21 20 26 D 600 25 22 24 E 700 32 30 31 The cost to sell for each product consists of a 10 percent sales commission. The normal profit percentage for each product is 35 percent of the selling price. Required: 1. Determine the carrying value of inventory at December 31, 2018, assuming the lower of cost or market (LCM) rule is applied to individual products. 2a. Determine the carrying value of inventory at December 31, 2018, assuming the LCM rule is applied to the entire inventory. 2b. Assuming inventory write-downs are usual business practice for Forester, record any necessary year-end adjusting entry.

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Product Quantity Unit Cost Repl Cost Selling Price NRV per Unit (Ceiling) NRV-Normal Profit
A 1000 $         28.00 $         30.00 $                34.00 34-(34*10%) $                         30.60 30.60-(34*35%) $    18.70
B 900 $         33.00 $         29.00 $                36.00 36-(36*10%) $                         32.40 32.4-(36*35%) $    19.80
C 500 $         21.00 $         20.00 $                26.00 26-(26*10%) $                         23.40 23.4-(26*35%) $    14.30
D 600 $         25.00 $         22.00 $                24.00 24-(24*10%) $                         21.60 21.60-(24*35%) $    13.20
E 700 $         32.00 $         30.00 $                31.00 31-(31*10%) $                         27.90 27.90-(31*35%) $    17.05
Part -1
Product RC Ceiling Floor Market Value Cost LCM
A $                      30,000 $       30,600 $       18,700 $              30,000 $                             28,000 $                      28,000
B $                      26,100 $       29,160 $       17,820 $              26,100 $                             29,700 $                      26,199
C $                      10,000 $       11,700 $         7,150 $                7,150 $                             10,500 $                         7,150
D $                      13,200 $       12,960 $         7,920 $              13,200 $                             15,000 $                      13,200
E $                      21,000 $       19,530 $       11,935 $              19,530 $                             22,400 $                      19,530
Total $              95,980 $                           105,600 $                      94,079
Part -2a
Product RC Ceiling Floor Market Value Cost LCM
A $                      30,000 $       30,600 $       18,700 $              30,000 $                             28,000
B $                      26,100 $       29,160 $       17,820 $              26,100 $                             29,700
C $                      10,000 $       11,700 $         7,150 $                7,150 $                             10,500
D $                      13,200 $       12,960 $         7,920 $              13,200 $                             15,000
E $                      21,000 $       19,530 $       11,935 $              19,530 $                             22,400
Total $              95,980 $                           105,600 $                      95,980
Part -2b
Amount of Loss from inventory write down 105600-95980 $                         9,620.00
Cost of Goods Sold Debit $   9,620.00
Inventory Credit $          9,620.00

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