A physical inventory of Liverpool Company taken at December 31 reveals the following.          Per Unit Item Units Cost Market Car audio equipment               Speakers 350 $ 105   $ 113   Stereos 265   126     116   Amplifiers 331   101     110   Subwoofers 209   67     57   Security equipment               Alarms 485   165     155   Locks 296   108     98   Cameras 217   327     337   Binocular equipment               Tripods 190   89     99   Stabilizers 175   110     120      Required:1. Calculate the lower of cost or market for the inventory applied separately to each item.2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

Question

A physical inventory of Liverpool Company taken at December 31 reveals the following.   
  

    Per Unit
Item Units Cost Market
Car audio equipment              
Speakers 350 $ 105   $ 113  
Stereos 265   126     116  
Amplifiers 331   101     110  
Subwoofers 209   67     57  
Security equipment              
Alarms 485   165     155  
Locks 296   108     98  
Cameras 217   327     337  
Binocular equipment              
Tripods 190   89     99  
Stabilizers 175   110     120  
 

 
Required:
1. 
Calculate the lower of cost or market for the inventory applied separately to each item.
2. If the market amount is less than the recorded cost of the inventory, then record the LCM adjustment to the Merchandise Inventory account.

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