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?

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

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

No adjustment should be made to inventory once it is written down.

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