Lower of Cost or Market General Journal Instructions Chart of Accounts Next Level Instructions The inventories of Berry Company for the years 2016 and 2017 are as follows: Cost Market January 1, 2016 $10,000 $10,000 December 31, 2016 13,000 11,500 December 31, 2017 16,000 14,000 Berry uses a perpetual inventory system. Required: 1. Assume the inventory that existed at the end of 2016 was sold in 2017. Prepare the necessary journal entries at the end of each year to record the correct inventory valuation if Berry uses the: a. direct method b. allowance method 2. Next Level Explain any differences in inventory valuation and income between the two methods. General Journal Assume Berry uses the direct method. Prepare the necessary journal entries to record: 1. the correct inventory valuation on December 31, 2016 2. the reduction in inventory when the inventory from December 31, 2016 is sold during 2017 Additional Instructions 3. the correct inventory valuation on December 31, 2017 How does grading work? PAGE 9 GENERAL JOURNAL Score: 72/76 POST. REF DATE ACCOUNT TITLE DEBIT CREDIT Dec. 31, 2016 Cost of Goods Sold 1,500.00 1 Inventory 1,500.00 2 1,500.00 Jun. 30, 2017 Cost of Goods Sold 3 Inventory 1,500.00 4 Dec. 31, 2017 Cost of Goods Sold 2,000.00 5 2,000.00 Inventory 6 Points 14.21/15 Assume Berry uses the allowance method