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The Nittany Lion Company has 200 units of Product K on December 31, 2020, which...

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Accounting

The Nittany Lion Company has 200 units of Product K on December 31, 2020, which originally cost $30. The replacement cost of Product K is $15. Product K sells for $25, has associated selling costs of $3, and a normal profit margin would be $5. Nittany Lion Company treats any inventory write-downs as losses.

Question: Suppose Nittany Lion Company uses a perpetual LIFO inventory system. Which of the following would be reflected in a journal entry on December 31, 2020 to record the subsequent measurement of inventory?

Debit to loss for $2,600

Debit to loss for $1,600

Debit to loss for $3,000

Debit to loss for $1,000

Debit to loss for $3,400

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