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

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