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Company ABC purchases inventory on account during the period, costing $85,000....

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Accounting

Company ABC purchases inventory on account during the period, costing $85,000. At year-end, it's determined that 15% of the inventory is obsolete with a net realizable value of only $3,000. What is the necessary adjusting entry?
A) Debit Cost of Goods Sold $12,750; Credit Inventory $12,750
B) Debit Loss on Obsolete Inventory $12,750; Credit Inventory $12,750
C) Debit Cost of Goods Sold $72,250; Credit Inventory $72,250
D) Debit Loss on Obsolete Inventory $79,750; Credit Inventory $79,750
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