The ending inventory of a company was

$45,000

as per the perpetual inventory records. The current replacement cost for the ending inventory is

$43,000.

The journal entry to adjust inventory is:

A.

Merchandise Inventory	2,000
Cost of Goods Sold		2,000

B.

Cost of Goods Sold	43,000
Merchandise Inventory		43,000

C.

Merchandise Inventory	43,000
Cost of Goods Sold		43,000

D.

Cost of Goods Sold	2,000
Merchandise Inventory		2,000

The ending inventory of a company was $158,000 as per the perpetual inventory records. The current replacement cost for the ending inventory is $148,000. The journal entry to adjust inventory is:

A.

Merchandise Inventory	10,000
Cost of Goods Sold		10,000

B.

Cost of Goods Sold	10,000
Merchandise Inventory		10,000

C.

Cost of Goods Sold	148,000
Merchandise Inventory		148,000

D.

No journal entry is needed.