1) On February 1, 2021, ABC transferred (sold) to a factor, with Responsibility ("with recourse"), $100,000 of its accounts receivable. The factor charges a financing fee of 3% of the transferred accounts and retains 5% of the balance of accounts receivable for adjustments for discounts and returns. Assume that the liability obligation is worth fair $1,000. ABC will recognize an upward loss of: a. $5,000.

b. $3,000. c. $4,000. d. $9,000.

2) Salvador Inc. uses the FIFO method for internal purposes and LIFO for external purposes. The balance of the LIFO Reserve Account at the end of 2020 was $140,000. The balance of the same account at the end of 2021 is $210,000. Salvador Inc. has a balance in the cost of goods sold account of $1,050,000 Product of sales recorded under FIFO during the year, what will be the balance of the cost of sold account that will be reported in the financial statements for year 2021 after LIFO Reserve Adjustment? a. $1,260,000. b. $980,000. c. $1,050,000. d. $1,120,000.