1.CampingGear, Inc. had 400 units of inventory on hand at the end of the year. These were recorded at a cost of $18 each using the lastin, first

out (LIFO) method. The current replacement cost is $16 per unit. The selling price charged by CampingGear, Inc. for each finished product is $26. As a result of recording the adjusting entry as per the lower minus ofcostormarket rule, the gross profit will________.

A.

decrease by $ 6 comma 400

$6,400

B.

decrease by $ 800

$800

C.

increase by $ 800

$800

D.

increase by $ 6 comma 400

2.RallyWheels, Inc. had the following balances and transactions during2018:

Beginning Merchandise Inventory as of

January1, 2018 240 units at $ 75

March 10 Sold 60 units

June 10 Purchased 960 units at $ 80

October 30 Sold 175 units

What would thecompany's ending merchandise inventory cost be on December31, 2018 if the perpetual inventory system and the lastin, firstout inventory costing method areused?

A.

$ 76 comma 800

$76,800

B.

$94,800

C.

$18,500

D.

$76,300