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Carrington Company applies the lower-of-cost-or-market rule to each individual item in its ending inventory. The...

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Question

Accounting

Carrington Company applies the lower-of-cost-or-market rule to each individual item in its ending inventory. The company determines that it must write down its inventory by $4,000. Which of the following answers reflects how this inventory write-down would affect Carrington's financial statements?
Assets
=
Liab.
+
Equity
Rev
Exp
=
Net Inc.
Cash Flow
a
(4,000)
=
n/a
(4,000)
n/a
-
4,000
=
(4,000)
n/a
b
(4,000)
=
n/a
(4,000)
n/a
-
4,000
=
(4,000)
(4,000) OA
c
(4,000)
=
n/a
(4,000)
n/a
-
n/a
=
n/a
n/a
d
4,000
=
n/a
4,000
4,000
-
n/a
=
4,000
n/a

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