LIFO Reserve Brunswick Corporation reported LIFO inventories of $546.9 million on January 1, 2003. A footnote to the financial statements indicated that the "LIFO cost was $85.7 million lower than the FIFO cost of inventories." 1. Has the cost of Brunswick's inventory generally been increasing or decreasing? Explain. 2. Suppose Brunswick sold its entire inventory for $700 million the subsequent year and did not replace it. Compute the gross profit from the sale of this inventory

(a) as Brunswick would report it using LIFO and

(b) as it would have been reported if Brunswick had always used FIFO instead of LIFO. Which inventory method creates higher gross profit? Explain.