18. Adjusting for alternative accounting methods: effects of Irquidation] The Noland Company [NOLD] reported the follow- ing operating results: Years Ended December 31 in (Sthousands) Sales COGS Gross margin 1997 1998 1999 $464,965 $465,479 $482,830 371.212 372,033 385,892 $ 93,753 $ 93,446 $ 96,938 In its 1999 annual report, the company states that 1999's gross profit margin suffered from the year-end ] IFO adjustment which increased cost of goods sold by $1.391,000 compared to $381.000 a year ago. Information from the company's inventory footnote is presented below: December 31 (in Sthousands) 1997 1998 1999 Inventory, at approximate $98.965 $103,446 $104,106 replacement cost Reduction to LIFO LIFO inventory 32,495 $66,470 32,876 34,267 $ 70,570 $ 69,839 Liquidation of certain inventory layers carried at the higher/lower costs that prevailed in prior years as compared with the costs of 1999, 1998, and 1997 purchases had the effect of increasing 1999 and 1997 net income $47 thousand and $393 thousand, respec- tively, and decreasing 1998 net income $150 thousand

a. Describe the "year-end LIFO adjustment" and show how the company calculated it for both 1998 and 1999.