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The following inventory information was taken from the records of GlobeKom Ltd: Historical cost $12,000 Replacement...

The following inventory information was taken from the records of GlobeKom Ltd:

Historical cost $12,000
Replacement cost $9,000
Expected selling price $10,000
Expected selling cost $1,500
Normal profit margin 10% of selling price

Under U.S. GAAP, what should be the impairment loss for inventory (assuming LCM method is used)?

A.

$2,000
B.

$3,500
C.

$0
D.

$1,500
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