A Company's Current Inventory Consists of 5,000 Units Purchased at $6

question 105

Multiple Choice

A company's current inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

• A)Debit Merchandise Inventory $25,000;credit Cost of Goods Sold $25,000.
• B)Debit Cost of Goods Sold $30,000;credit Merchandise Inventory $30,000.
• C)Debit Cost of Goods Sold $5,000;credit Merchandise Inventory $5,000.
• D)Debit Loss on Inventory $5,000;credit Cost of Goods Sold $5,000.
• E)Debit Merchandise Inventory $30,000;credit Cost of Goods Sold $25,000.