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  3. forest company has five products in its inventory.

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

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Accounting

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

Product Quantity Unit Cost Unit Replacement Cost Unit Selling Price
A 900 $ 23 $ 25 $ 29
B 500 28 24 31
C 700 16 15 21
D 1,000 20 17 19
E 700 27 25 26

The cost to sell for each product consists of a 15 percent sales commission. The normal profit for each product is 35 percent of the selling price.

Required:

  1. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products.
  2. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory.
  3. Assuming inventory write-downs are common for Forest, record any necessary year-end adjusting entry based on the amount calculated in requirement 2.
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Complete this question by entering your answers in the tabs below. Determine the carrying value of inventory, assuming the LCM rule is applied to the entire inventory. Note: Do not round intermediate calculations. Complete this question by entering your answers in the tabs below. Determine the carrying value of ending inventory, assuming the lower of cost or market (LCM) rule is applied to individual products. Note: Do not round intermediate calculations. Journal entry worksheet Record any necessary year-end adjusting entry assuming that inventory writedowns are common for Forest Company. Note: Enter debits before credits
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