Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2011, December 31, 2012, and December 31, 2013, as shown below.

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Instructions(a) Prepare the journal entries required at December 31, 2012, and at December 31, 2013, assuming that a perpetual inventory system and the cost-of-goods-sold method of adjusting to lower-of-cost-or-market is used.(b) Prepare the journal entries required at December 31, 2012, and at December 31, 2013, assuming that a perpetual inventory is recorded at cost and reduced to lower-of-cost-or-market using the lossmethod.

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Lower-of-Cost-or-Market $650.000 712.000 830,000 Cost $650,000 780,000 905,000 12/31/11 12/31/12 12/31/13