Schonfeld Company determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2012, 2013, and 2014, as follows:

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Instructions
(a) Prepare the journal entries that are required at December 31, 2013 and 2014, assuming that a periodic inventory system and the direct method of adjusting to NRV are used.
(b) Prepare the journal entries that are required at December 31, 2013 and 2014, assuming that a periodic inventory system is used, with inventory recorded at cost and reduced to NRV through the use of an allowance account.

Transcribed Image Text:

Lower of Cost and Net Realizable Value $720,000 918,400 880,000 Cost Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 $720,000 980,000 950,000