Given the following information for the Tea Company:

Date	Cost	Market
December 31, 2016	$ 800	$ 800
December 31, 2017	1,000	1,000
December 31, 2018	1,200	1,060

Under the periodic system, if the allowance method of recording lower of cost or market is in use, which December 31, 2018 entry is correct?

Inventory		140
	Cost of Goods Sold			140

Loss Due to Market Valuation		140
	Allowance to Reduce Inventory to Market			140

Cost of Goods Sold		140
	Inventory			140

Allowance to Reduce Inventory to Market		140
	Loss Recovery Due to Market Valuation			140