1. Northwest Fur Co. started the year with $93,000 of merchandise inventory on hand. During the year, $430,000 in merchandise was purchased on account with credit terms of 1/15, n/45. All discounts were taken. Northwest paid freight-in charges of $8,000. Merchandise with an invoice amount of $4,700 was returned for credit. Cost of goods sold for the year was $374,000. What is ending inventory?

2. Which inventory cost flow assumption generally results in the lowest reported amount for inventory when inventory costs are rising?