Company a Has Inventory at the End of the Year

Multiple Choice

Company A has inventory at the end of the year with a cost of $75,000. Under the LCM rules, the value of the inventory is $72,600.The journal entry to record the write-down to LCM will:

A) increase cost of goods sold and increase ending inventory.
B) increase cost of goods sold and decrease ending inventory.
C) decrease cost of goods sold and decrease ending inventory.
D) decrease cost of goods sold and increase ending inventory.