At December 31, the Selig Company has ending inventory with a historical cost of $634,000. Assume the company uses the FIFO perpetual inventory system. The net realizable value is $612,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used?
A) Debit Cost of Goods Sold for $28,000 and credit Inventory for $28,000.
B) Debit Inventory for $28,000 and credit Cost of Goods Sold for $28,000.
C) Debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000.
D) Debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000.

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The Answer of At December 31, the Selig Company has ending inventory with a historical cost of $634,000. Assume the company uses the FIFO perpetual inventory system. The net realizable value is $612,000. The normal profit on this inventory is $50,000. Before any adjustments at the end of the period, the cost of goods sold account has a balance of $900,000. Following U.S. GAAP, which journal entry is required on December 31 to adjust the ending balance of inventory if the direct method is used?
A) Debit Cost of Goods Sold for $28,000 and credit Inventory for $28,000.
B) Debit Inventory for $28,000 and credit Cost of Goods Sold for $28,000.
C) Debit Cost of Goods Sold for $22,000 and credit Inventory for $22,000.
D) Debit Inventory for $22,000 and credit Cost of Goods Sold for $22,000.

At December 31, the Selig Company Has Ending Inventory with a Historical