Negredo Medical Supplies uses LIFO cost flow assumption and has developed the following data for its products: Surgical Equipment 4001 Surgical Supplies 370 Number of units in inventory Per unit: Selling Price Cost Replacement cost Cost to sell Normal gross profit ratio 345 255 325 64 30% 205 175 165 22 35% Normal gross profit ratio is expressed as a percentage of selling price. Negredo adjusts an allowance account at year-end to record net realizable value adjustments to its inventory. All products are reported at cost at the beginning of the year. The entry at year-end will: Multiple Choice reduce equity by $3,700 increase liabilities by $3,700 oooo reduce assets by $31,000 reduce equity by $31,000