Shipman,Inc.has 7 units in inventory on December 31.The units were purchased in November for $190 each.The price lists from suppliers indicate the current replacement cost of the item to be $186 each.What is the effect on gross profit if Shipman values its ending merchandise inventory using the lower-of-cost-or-market rule?

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Merchandise Inventory to be written down to market value
 11ea86d6_8225_0954_92b6_5dd2f71899c2_TB2804_00 Total amount to be written down from Merchandise Inventory
 11ea86d6_8225_3065_92b6_6d1526b26e1d_TB2804_00 Because this will increase the cost of goods sold by $28,the gross profit will decrease by $28.