At December 31, the Wendy Company has ending inventory with a historical cost of $633,000 valued using FIFO. Assume the company uses the perpetual inventory system. The net realizable value of the inventory is $620,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the indirect method is used? O A. Debit Loss on Inventory Writedown for $13,000 and credit Allowance to Reduce Inventory to Market for $13,000. O B. Debit Inventory for $37,000 and credit Cost of Goods Sold for $37,000. OC. Debit Cost of Goods Sold for $13,000 and credit Inventory for $13,000. O D. Debit Cost of Goods Sold for $37,000 and credit Inventory for $37,000.

At December 31, the Wendy Company has ending inventory with a historical cost of $633,000 valued using FIFO. Assume the company uses the perpetual inventory system. The net realizable value of the inventory is $620,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the indirect method is used? O A. Debit Loss on Inventory Writedown for $13,000 and credit Allowance to Reduce Inventory to Market for $13,000. O B. Debit Inventory for $37,000 and credit Cost of Goods Sold for $37,000. OC. Debit Cost of Goods Sold for $13,000 and credit Inventory for $13,000. O D. Debit Cost of Goods Sold for $37,000 and credit Inventory for $37,000.