The controller of Utah Corp. has provided you with the following information relating to its inventory:

Date Cost Lower of cost and NRV

Dec 31/14 $457,000 $410,000

Dec 31/15 $615,000 $555,000

Utah uses the periodic inventory system, and records its inventory at cost. An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV.

Instructions

Prepare the journal entries that Utah would have prepared for its 2014 and 2015 year ends, assuming that 2014 was its first year of operations.