21. At December 31, the Selig Company has ending inventory with a historical cost of $ 635,000. Assume the company uses the FIFO perpetual inventory system. The net realizable value is $ 616,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used?

A.Debit Cost of Goods Sold for$19,000 and credit Inventory for$19,000.

B.Debit Cost of Goods Sold for$31,000and credit Inventory for$31,000.

C.Debit Inventory for$31,000 and credit Cost of Goods Sold for $31,000.

D.Debit Inventory for$19,000and credit Cost of Goods Sold for $19,000.