Question: ABC, Inc. must write down its inventory by $15,000 to the net realizable value of $400,000. What is the effect of this write-down in the

ABC, Inc. must write down its inventory by $15,000 to the net realizable value of $400,000. What is the effect of this write-down in the current period financial statements?

Decrease accounts payable.

Decrease the cost of goods sold.

Increase pretax income.

Decrease ending inventory on the balance sheet.

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