Exhibit 9-2 the Jenny Company Uses a Periodic Inventory Accounting

Exhibit 9-2 The Jenny Company uses a periodic inventory accounting system and values its inventory by using the lower of cost or market rule.The allowance method is used in applying the lower of cost or market rule.The company adjusts and closes its books annually on December 31.Below are the cost and market values of the company's year-end inventories for a three-year period:
$\begin{array}{lll}\text { Date } &\text { Cost }& \text { Market } \\\hline \text { December 31, 2010 } &\$ 70,000 & \$ 70,000 \\\text { December 31, 2011 } & 56,000 & 46,000 \\\text { December 31, 2012 } & 64,000 & 58,000\end{array}$
- Refer to Exhibit 9-2.Which of the following journal entries would be correct as of December 31, 2012, to apply the lower of cost or market rule?

A)
Inventory $\quad$$\quad$ 58,000
Income Summary $\quad$ 58,000
B)
Loss Due to Market Valuation $\quad 6,000$
Allowance to Reduce Inventory to Market $\quad 6,000$
C)
Allowance to Reduce Inventory to Market $\quad 4,000$
Loss Recovery Due to Market Valuation $\quad 4,000$
D)
Cost of Goods Sold $\quad 6,000$
Allowance to Reduce Inventory to Market $\quad 6,000$