Brandon, Inc. has 500 units in inventory that were purchased for $24 each. These units have a current market value of $30 each. Brandon's supplier has just announced a price increase to $33 that will go into effect at the beginning of next year. Management should:
A. adjust the inventory account using the cost, which is $24.00.
B. adjust the inventory account using the average of the recent market values, which is $33.00.
C. adjust the inventory account using the lower of the recent market values, which is $30.00.
D. make no adjustments to the inventory account.
Answer: D
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