Mystical Duds Estimates That Unsold Women's Clothing with a Carrying

Mystical Duds estimates that unsold women's clothing with a carrying value of $500 million has minimal market value given a change in fashion.To reflect the minimal market value of the merchandise, Mystical Duds

A) would record an impairment loss of $500 million, reducing the carrying value of this inventory to zero.
B) would recognize zero cost of goods sold and a gross margin of $100 million on the sale, for a net margin of -$400 (=-$500 + $100) million over the two periods, if the firm sells the clothes for $100 million in a subsequent accounting period.
C) would record an impairment loss of $400 million, reducing the carrying value of this inventory to $100 million.
D) would recognize $100 million of cost of goods sold and a gross margin of zero on the sale, for a net margin of -$400 (=-$500 + $100) million over the two periods, if the firm sells the clothes for $100 million in a subsequent accounting period, if the firm sells the clothes for $100 million in a subsequent accounting period.
E) would record/recognize choices a and b.

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