Adjustments to lower of cost and NRV The controller of Utah Corp.has provided you with the following information relating to its inventory: 
Utah uses the periodic inventory system, and records its inventory at cost.An allowance account is adjusted at the end of each year to adjust the value of the inventory to the lower of cost and NRV. Instructions Prepare the journal entries that Utah would have prepared for its 2014 and 2015 year ends, assuming that 2014 was its first year of operations.
Definitions:
Direct Materials
Raw materials that are directly attributable to the product being manufactured and are a significant component of its cost.
Variable Manufacturing Overhead
Costs of manufacturing that vary with the level of production, such as utilities for the production facility and raw materials.
Cash Conversion Cycle
A metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Days' Sales
A financial ratio that measures the average number of days it takes a company to convert its receivables into cash.
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