n the following information for the Network Company: Date Cost Market December 31, 2004 $ 800 $ 800 December 31, 2005 1,000 920 December 31, 2006
Given the following information for the Network Company:
Date Cost Market
December 31, 2004 $ 800 $ 800
December 31, 2005 1,000 920
December 31, 2006 1,100 1,050
If the allowance method of recording lower of cost or market is in use, which December 31, 2006 entry is correct?
a. Loss Due to Market Valuation 50
Allowance to Reduce Inventory to Market 50
b. Allowance to Reduce Inventory to Market 30
Loss Recovery Due to Market Valuation 30
c. Inventory 1,050
Income Summary 1,050
d. Income Summary 920
Inventory 920
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