By what amount, if any, should each item (considered separately) be written down?

Broderick Company sells lumber. Inventory cost data per 1,000 board feet of lumber for the Broderick Company are as follows:

Item

Plywood

Oak

Pine

Redwood

Quantity on hand.

25

20

4300%

12

Original cost

600

$2,000

$800

$1,400

Current replacement cost.

600

1,800

700

1,800

Net realizable value

$500

1,900

800

1,600

Net realizable value minus normal profit

400

1,850

600

1,300

1. By what amount, if any, should each item (considered separately) be written down?

2. Make the appropriate journal entry (or entries):

a. Assuming that each inventory item is considered separately.

b. Assuming that LCM is applied to total inventory.

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