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	15,000	14,000

Berry uses a perpetual inventory system.

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
	3. the correct inventory valuation on December 31, 2017

Assume Berry uses the allowance 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
	3. the correct inventory valuation on December 31, 2017