Ace Hardware Store sells two product categories, tools and paint products. Information pertaining to its year-end inventory is as follows:

Required:
1. Determine the carrying value of inventory at year-end, assuming the lower of cost or net realizable value (LCNRV) rule is applied to (a) individual products, (b) product categories, and (c) total inventory.
2. Assuming inventory write-downs are common for Ace, record any necessary year-end adjusting entry for each of the LCNRV applications in requirement 1.

Inventory, by Product Category Tools: Hammers Saws Screwdrivers Paint products: 1-gallon cans Paint brushes Quantity 100 200 300 500 100 Per Unit Cost $ 5.00 10.00 2.00 6.00 4.00 Net Realizable Value $5.50 9.00 2.60 5.00 4.50