Hot Pepper Company had the following information in its accounting records at year end: Inventory Cost $4,000,000 It estimates the net realizable value of this inventory is $3,500,000. As a result of this information Hot Pepper Co. would:

Multiple Choice

• Make a journal entry debiting the allowance for inventory valuation for $500,000

• Make a journal entry debiting a gain on market appreciation for $500,000

• Make a journal entry crediting the allowance for inventory valuation for $500,000

• Make no entry