Inventory Cost Flow Assumptions

Essay

Inventory cost flow assumptions
Kanga Corp.’s records reported an inventory cost of $51,400 and a net realizable value of $48,500 at December 31, 2019. At December 31, 2020, the records indicated a cost of $67,900 and a net realizable value of $59,500. All opening inventory had been sold during the year.
Instructions
Assuming that Kanga Corp. uses a perpetual inventory system, prepare the necessary December 31, 2020 entry under the direct method and the indirect method.