5- The following inventory information was taken from the records of Kleinfeld Inc.:

Historical cost $12,000

Replacement cost $7,000

Expected selling Price $9,000

Expected selling cost $500

Normal profit margin 50% of price

Assume that subsequent to your adjustment the expected selling price increases to $13,000 (all the rest of the facts are the same). What adjustment to Inventory should be made under IAS 2 after this event?

a) Inventory should be increased (debited) by $3,500.

b) Inventory should be increased (debited) by $4,000.

c) No adjustment should be made to Inventory once it is written down.

d) Inventory should be increased (debited) by $1,000.