7. [LIFO Reserve.) How to covert COGS under LIFO to COGS under FIFO? a. Add the change in the LIFO reserve to COGS under LIFO to yield COGS under FIFO. b. Deduct the change in the LIFO reserve from COGS under LIFO to yield COGS under FIFO. c. Neither of the above. 8. On July 1, 2006, the ABC Co. sold equipment it no longer needed for $100,000. On 12/31/05, the balance in the Equipment Account was $130,000 and the balance in the Accumulated Depreciation account as $40,000. The company uses the straight-line depreciation method, based on an estimated salvage value of $20,000 and estimated life of 11 years. Assuming that the accountant makes all of the necessary journal entries, what was the amount of gain or loss on the sale. Hint: don't forget to consider the additional 6 months of depreciation expense before calculating the gain or loss. a. Loss of $27,500 b. Gain of $12,500 c. Gain of $15,000