1. Glover Corp. sells the handheld electronic device. At the end of 2017, the company had a large stock of inventory that became obsolete. The current inventory had a laid-down cost of $107,000. The company estimated that this old inventory could be sold for approximately $85,000. The regular commission on sales is 10% but sale person was given an additional 5% to further accelerate the sales.

In early 2018, the company discovered that some of the inventory could be upgraded and modified which would allow the product to complete effectively in the market. In February 2018, these inventories were upgraded at a cost of $10,000. The company estimated that after the conversation, the newly adapted inventory could be sold for $118,000(before regular commission) in the market.

Required

Using the valuation allowance method, prepared the appropriate journal entries to record inventory adjustments for 2017 and 2018.