At the end of 2017, Dasani Corp. has inventory on its shelves with a book value (historical cost) of $75,000. Dasani believes that it can sell this inventory in the future for a total sales price of $140,000. The current market value of the inventory is determined to be $62,000.

Based on this information, which of the following will Dasani Corp. record as part of its adjusting journal entry for ending inventory?

• Gain on inventory write-up of $65,000

• Cost of goods sold (or loss on inventory write-down) of $65,000

• Gain on inventory write-up of $13,000

• Cost of goods sold (or loss on inventory write-down) of $13,000

• No adjusting journal entry will be recorded