1. RF Company had January 1 inventory of $200,000 when it adopted dollar-value LIFO. During the year, purchases were $1,200,000 and sales were $2,000,000. December 31 inventory at year-end prices was $286,720, and the price index was 112.

What is RF Company's ending inventory?

a. $200,000.

b. $256,000.

c. $262,720

d. $286,720.

2. Kesler, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on sales is 20%. The following account balances are available:

Inventory, March 1 $440,000 Purchases 344,000 Purchase returns 16,000 Sales during March 600,000

The estimate of the cost of inventory at March 31 would be

a. $168,000.

b. $288,000.

c. $318,000.

d. $224,000.