This company started business at the beginning of Year 1. The company applies the LCNRV rule to its inventory as a whole. Inventory cost and Net Realizable Value as of the end of Year 1 and Year 2 were as follows:

Cost NRV

Year 1 $1,000 $ 800

Year 2 1,700 1,650

The adjusting entry at the end of Year 2 to value the inventory at the Lower of Cost or Net Realizable Value will include -

• CREDIT to Allowance for Inventory Write-Down of $200
• DEBIT to Gain from Inventory Write-Up of $150
• DEBIT to Allowance for Inventory Write-Down of $50
• DEBIT to Allowance for Inventory Write-Down of $150
• None of these