Information about the ending inventories of Charleston Chair Company, who applies the LIFO method, is shown below:

Year	Cost	Current	Selling	Cost of	Normal
		Replacement Cost	Price	Completion	Profit Margin
2020	$10,000	$11,500	$12,000	$1,000	$1,100
2021	15,000	13,000	14,000	1,500	1,250
2022	20,000	18,600	24,000	2,200	2,900

Required:

a.

Determine the value of the inventory for each year using the lower of cost or market rule.

b.

Assuming that Charleston Chair Company maintains a periodic inventory system, prepare journal entries for 2022 to record the reduction of the inventory to market value using:

1.

the direct method

2.

the allowance methodb1. Assuming that Charleston Chair Company maintains a periodic inventory system, prepare journal entries for December 31, 2022 to record the reduction of the inventory to market value using the direct method. b2. Assuming that Charleston Chair Company maintains a periodic inventory system, prepare journal entries for December 31, 2022 to record the reduction of the inventory to market value using the allowance method.