Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of the following represents the financial statement effect of writing-down the inventory?

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The Answer of Garrett Company uses the perpetual inventory system. The company's records showed a book balance of $18,000 in the Merchandise Inventory account, and a physical count finds only $16,250 of inventory. Which of the following represents the financial statement effect of writing-down the inventory?

Garrett Company Uses the Perpetual Inventory System