3.

Waterway Inc. uses a perpetual inventory system. At January 1, 2025, inventory was $496,480 at both cost and net realizable value. At December 31, 2025, the inventory was $663,520 at cost and $614,800 at net realizable value. Prepare the entry under (a) the cost-of-goods-sold method and (b) the loss method. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)