Blue Enterprise's records reported an inventory cost of $$55,600$ and a net realizable value of $$54,000$ at December $31,2021.$ At December $31,2022,$ the records indicated a cost of $$68,700$ and a net realizable value of $$61,625.$ All opening inventory had been sold during the year.

Assuming that Blue Enterprise uses a perpetual inventory system, which of the following entries will be recorded on the December $31,2022$ under indirect method.

Question $26$Select one:

a$.$

Debit cost of goods sold of $$7,075$

b$.$

Credit allowance to reduce inventory to NRV of $$1,600$

c$.$

Credit allowance to reduce inventory to NRV of $$5,475$

d$.$

Credit inventory of $$7,075$