Given the following information for the Tea Company:

Date	Cost	Market
December 31, 2014	$ 800	$ 800
December 31, 2015	1,000	940
December 31, 2016	1,100	1,060

Under the periodic system, if the allowance method of recording lower of cost or market is in use, which December 31, 2016 entry is correct?

Income Summary 1,000 Inventory 1,000

Loss Due to Market Valuation 20 Allowance to Reduce Inventory to Market 20

Inventory 1,100 Income Summary 1,100

Allowance to Reduce Inventory to Market 20 Loss Recovery Due to Market Valuation 20