Given the Following Information for the Rachel Company If the Allowance Method of Recording Lower of Cost or Date

Given the following information for the Rachel Company: $\begin{array}{lll}\text { Date } & \text { Cost } & \text { Market } \\\hline \text { December 31, 2010 } & \$ 500 & \$ 500 \\\text { December 31, 2011 } & 700 & 650 \\\text { December 31, 2012 } & 800 & 730\end{array}$ If the allowance method of recording lower of cost or market is in use, which December 31, 2012, entry is correct?

A)
Loss Due to Market Valuation $\quad$$\quad$ 20
Allowance to Reduce Inventory to Market $\quad$ 20
B)
Inventory $\quad$$\quad$ 730
Income Summary $\quad$ 730
C)
Loss Due to Market Valuation $\quad$$\quad$ 70
Allowance to Reduce Inventory to Market $\quad$ 70
D)
Allowance to Reduce Inventory to Market $\quad$ 800
Income Summary $\quad$$\quad$ 800