On Dec 4, 2018, DoCo enters into a contractual agreement to take delivery on Jan 5, 2019 of 10,000 lbs of n..s@$2.20 per lbs.

On Dec 31, 2018, DoCo finds that market price of the nuts dropped to $1.90 per lbs & management decides that the decline is permanent.

When DoCo takes delivery on Jan 25, 2019, the market price of nuts is $1.75 per lbs. DoCo should...

a) debit inventory $17,500 b) debit inventory $22,000 c) debit loss $4,000 d) debit retained earnings $3,000