Business, 11.04.2020 04:05 sssavannahh

Blossom Company began operations in 2019 and determined its ending inventory at cost and at lower-of-LIFO-cost-or-market at December 31, 2019, 2020 and 2021.
This information is presented below.
December 31, 2019 Cost $83,520 Lower-of-Cost-or-Market $68,160
December 31, 2020 96,000 94,080
December 31, 2021 93,120 93,120

(a) Prepare the journal entries required at December 31, 2019, and December 31, 2020, assuming that the inventory is recorded at market, and a perpetual inventory system (cost-of-goods-sold method) is used.

(b) Prepare journal entries required at December 31, 2019, and December 31, 2021, assuming that the inventory is recorded at market under a perpetual system (loss method is used).

(c) Which of the two methods above provides the higher net income in each year? Both, COGS Method, or Loss Method?

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