Used Cars Inc.

Used Cars Inc. has the following inventory of vehicles

CostNRV

Vehicle1 $ 25,000$25,500

V2$50,000$40,000

V3$16,000$18,000

V4$22,000$21,500

Total$113,000$105,000

In applying the lower of cost and net realizable value rule, by how much would Used Cars need to adjust its inventory?

a. Write down inventory by $2,500.

b. Write down inventory by $8,000.

c. Write down inventory by $10,500.

d. Write up inventory by $8,000.

e. No inventory adjustment is needed.