Prepare journal entries to record the lower of cost or market for each of the following alternatives
Lower of Cost or Market – The following are the inventories for the years 2007, 2008, and 2009 for the Parry Company:
Cost
Market
1-Jan-07
$50,000
$50,000
31-Dec-07
64,000
60,000
31-Dec-08
71,000
70,000
31-Dec-09
75,000
78,000
Required
Prepare journal entries to record the lower of cost or market for each of the following alternatives:
1. Allowance method, periodic inventory system
2. Allowance method, perpetual inventory system
3. Direct method, periodic inventory system
4. Direct method, perpetual inventory system
