1. Minun Company uses a periodic inventory method. At December 31,2017, Minun Company took a physical count of inventory but erroneously forgot to include inventory that they consigned to another company for sale. In the following year end, the company correctly counted their inventory. This error will:

1. increase net income in 2017 and decrease net income in 2018.
2. decrease net income in 2017 and increase net income in 2018.
3. increase net income in both 2017 and 2018.
4. decrease net income in both 2017 and 2018.

2. Data related to the inventories of Ace Medical Supply are presented below: (Ace uses FIFO for their inventory)

		Surgical				Rehab
		Supplies				Equipment
Selling price		$	100			$	340
Cost			90				250
Costs to sell			15				25

In applying the lower of cost or net realizable value rule, the inventory of rehab equipment would be valued at:

1. $315.
2. $340.
3. $225.
4. $250.