On April 1, a company purchased two units of inventory, A and B. The cost of unit A was $635, and the cost of unit B was $595. On April 30, the company had not sold the inventory. The net realizable value of unit A was now $650 while the net realizable value of unit B was $510. The adjustment associated with the lower of cost and net realizable value on April 30 will be:

1. Cost of Goods Sold 70 Inventory 70
2. Inventory 70 Cost of Goods Sold 70
3. Cost of Goods Sold 85 Inventory 85
4. Inventory 85 Cost of Goods Sold 85

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