Forester Company has five products in its inventory. Information about the December 31, 2021, inventory...
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Accounting
Forester Company has five products in its inventory. Information about the December 31, 2021, inventory follows.
Product
Quantity
Unit Cost
Unit Replacement Cost
Unit Selling Price
A
900
$
25
$
27
$
31
B
900
30
26
33
C
500
18
17
23
D
700
22
19
21
E
500
29
27
28
The cost to sell for each product consists of a 10 percent sales commission. The normal profit for each product is 35 percent of the selling price. Required:1. Determine the carrying value of inventory at December 31, 2021, assuming the lower of cost or market (LCM) rule is applied to individual products. 2. Determine the carrying value of inventory at December 31, 2021, assuming the LCM rule is applied to the entire inventory. 3. Assuming inventory write-downs are common for Forester, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
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