Ultimate Cookies sells various pastries for parties and events offered in two packages. The cost and NRV of each individual type of product/package in the business’s ending inventory as at December 31, 2022, are shown below. What is the journal entry to adjust merchandise inventory to LCNRV at the individual level?
| Cost | NRV | |
| Package 1 | $5,000 | $3,500 |
| Package 2 | $7,500 | $8,500 |
| Total | $12,500 | 12,000 |
Select one:
a. Debit cost of goods sold $1,500; credit merchandise inventory $1,500
b. Debit cost of goods sold $500; credit merchandise inventory $500
c. Debit loss on sales $2,500; credit merchandise inventory $2,500
d. Debit cost of goods sold $1,000; credit merchandise inventory $1,000
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