Applying the LMC, NeCo determines that as of December 31, 20X3, merchandise that originally cost $46,300 is not $43,500 a the market.

20X4, the market value of NeCo's inventory unexpectedly increase to $47,500. If the original credit to write-down inventory was to the inventory account, NeCo should...

a) recognize gain of $4,000

b) recognise gain of $2,000

c) make no financial entry but disclose the loss in the financial statements

d) make no entry and no disclosure