Mariah Company Has Inventory at the End of the Year

Multiple Choice

Mariah Company has inventory at the end of the year with a historical cost of $75,000.Mariah Company uses the perpetual inventory system.Under the LCM rules,the current replacement cost is $72,600.Under U.S.GAAP,the journal entry to record the write-down to LCM will:

A) debit Cost of Goods Sold for $2,400 and credit Inventory for $2,400.
B) debit Cost of Goods Sold for $2,400 and credit Purchases for $2,400.
C) debit Inventory for $2,400 and credit Cost of Goods Sold for $2,400.
D) debit Purchases for $2,400 and credit Cost of Goods Sold for $2,400.