Shipman,Inc.has 6 units in inventory on December 31.The units were purchased in November for $200 each.The price lists from suppliers indicate the current replacement cost of the item to be $198 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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C)Merchandise Inventory to be written down to market value 11ea8a42_4f35_2932_8b44_b956c2d770c5_TB5024_00 Total amount to be written down from Merchandise Inventory 11ea8a42_4f35_2933_8b44_c1b2970d5fe8_TB5024_00 Because this will increase the cost of goods sold by $12,the gross profit will decrease by $12.