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During a recession, a manufacturing company using a perpetual inventory system wrote down its inventory...

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Accounting

During a recession, a manufacturing company using a perpetual inventory system wrote down its inventory that cost $5.0 million to the net realizable value of $4.5 million. Two years later this inventory was still available for sale; however, its net realizable value had increased to $5.5 million. Using the LCNRV rule, what is the correct journal entry to record this change in value? Select answer from the options below Debit: Cost of Goods Sold, $1 million; Credit: Gain on Inventory Valuation, $1 million Debit: Inventory, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Gain on Inventory Valuation, $500,000; Credit: Cost of Goods Sold, $500,000 Debit: Inventory, $1 million; Credit: Gain on Inventory Valuation, $1 million

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