Perfect Catering Company's Ending Inventory Was $109,700 at Historical Cost

Perfect Catering Company's ending inventory was $109,700 at historical cost and $111,500 at current replacement cost. Before consideration of the lower-of-cost-or-market rule, the company's cost of goods sold was $65,000. Following U.S. GAAP, which of the following statements reflect the correct application of the lower-of-cost-or-market rule?

A) The Ending Inventory balance will be $109,700, and Cost of Goods Sold will be $65,000.
B) The Ending Inventory balance will be $111,500, and Cost of Goods Sold will be $65,000.
C) The Ending Inventory balance will be $111,500, and Cost of Goods Sold will be $66,800.
D) The Ending Inventory balance will be $111,500, and Cost of Goods Sold will be $63,200.