Intermediate A/c 1

Question z (0 points) Poly Sask Co. is a small grocery retailer. The company began operating in January 2020. Information pertaining to Poly Sask Co.'s year-end inventory follows: Net Realizable Value of Inventory Year End Date Cost of Inventory December 31, 2020 $1,248,600 $987,350 December 31, 2021 $1,388,450 $1,104,450 Inventory will be recorded on the balance sheet at the lower of cost and net realizable value. Poly Sask Co. has a December 31 year end and uses the perpetual inventory method. Required: 1. Prepare the journal entry required on December 31, 2020, assuming the direct method is followed. (2 marks) 2. Prepare the journal entry required on December 31, 2021, assuming the indirect or allowance method is followed. (4 marks)