Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2013, December 31, 2014, and December 31, 2015,
Malone Company determined its ending inventory at cost and at lower-of-cost-or-market at December 31, 2013, December 31, 2014, and December 31, 2015, as shown below.
\r\nCost Lower-of-Cost-or-Market
\r\n12/31/13 $650,000 $650,000
\r\n12/31/14 780,000 712,000
\r\n12/31/15 905,000 830,000
\r\nInstructions
\r\n(a) Prepare the journal entries required at December 31, 2014, and at December 31, 2015, assuming that the cost-of-goods-sold method of adjusting to lower-of-cost-or-market is used.
\r\n(b) Prepare the journal entries required at December 31, 2014, and at December 31, 2015, assuming that the loss method of adjusting to lower-of-cost-or-market is used.