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On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $650, and the cost of unit

On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $650, and the cost of unit B was $625. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $685 while the net realizable value of unit B was $550. The adjustment associated with the lower of cost and net realizable value on April 30 will be:

1. Cost of Goods Sold 40
Inventory 40
2. Inventory 40
Cost of Goods Sold 40
3. Cost of Goods Sold 75
Inventory 75
4. Inventory 75
Cost of Goods Sold 75
  • Option 3

  • Option 2

  • Option 4

  • Option 1

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