The following are the inventories for the years 2013, 2014, and 2015 for Parry Company:

Required:
1. Assume the inventory that existed at the end of each year was sold in the subsequent year. Prepare journal entries to record the lower of cost or market for each of the following alternatives:
a. allowance method, periodic inventory system
b. direct method, periodic inventory system
2. Next Level Refer to your answer for P8-2. How does the use of periodic inventory system affect the write down of inventory to the lower of cost or market?

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Cost Market January 1, 2013 December 31, 2013 December 31, 2014 December 31, 2015 50,000 $50,000 64000 .00 60,000 70,000 78,000 71,000 75,000