Sandra Company Had 200 Units of Inventory on Hand at the End

question 89

Multiple Choice

Sandra Company had 200 units of inventory on hand at the end of the year. These were recorded at a cost of $12 each using the last-in, first-out (LIFO) method. The current replacement cost is $10 per unit. The selling price charged by Sandra Company for each finished product is $15. In order to record the adjusting entry needed under the lower-of-cost-or-market rule, the Cost of Goods Sold will be:

• A)debited by $2,000.
• B)credited by $2,000.
• C)debited by $400.
• D)credited by $400.

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