XYZ Company began operations in 2018 and determined its ending inventory at cost and at a LCNRV at December 31, 2018, and December 31, 2019. This information is presented below. Cost Net Realizable Value 12/31/18 £520,000 £485,000 12/31/19 615,000 585,000 Instructions (you have the option to upload the answer sheet) (a) Prepare the journal entries required at December 31, 2018, and December 31, 2019, assuming that the inventory is recorded at LCNRV, using a perpetual inventory system and the cost-of-goods-sold method. (b) Prepare the journal entries required at December 31, 2018, and December 31, 2019, assuming that the inventory is recorded at cost, using a perpetual system and the loss method. (c) Which of the two methods above provides the higher net income in each year?

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The term "amortization" refers to spreading the value of a loan or a debt over a series of regular payments or installments comprising of both the principal and interest amount. It generally involves the process where in the value of a loan or an intangible asset is written down over its maturity period.