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

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