Reliable Fans, Inc. (RF), a hypothetical company, sells high quality fans and has been in business since 2006. Exhibit 4 provides relevant data and financial statement information about RF’s inventory purchases and sales of fan inventory for the years 2006 through 2009. RF uses the LIFO method and a periodic inventory system. What amount of RF’s 2009 gross profit is due to LIFO liquidation?

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EXHIBIT 4 RF Financial Statement Information under LIFO 2007 Fans units purchased Purchase cost per fan Fans units sold Sales price per fan LIFO Method Beginning inventory Purchases Goods available for sale Ending inventory* Cost of goods sold Income Statement Sales Cost of goods sold Gross profit Balance Sheet Inventory 2006 12,000 $100 10,000 $200 $0 1,200,000 1,200,000 (200,000) $1,000,000 $2,000,000 1,000,000 $1,000,0 12,000 $105 12,000 $205 $200,000 1,260,000 1,460,000 2008 12,000 $110 12,000 $210 $200,000 $200,000 *Ending inventory 2006, 2007, and 2008 = (2,000 $100) Ending inventory 2009 = (1,000 x $100) $200,000 1,320,000 1,520,000 (200,000) (200,000) (100,000) 1,260,000 $1,320,000 $1,480,000 2009 12,000 $115 13,000 $215 $200,000 $200,000 1,380,000 1,580,000 $2,460,000 $2,520,000 $2,795,000 1,260,000 1,320,000 1,480,000 $1,200,000 $1,200,000 $1,315,000 $100,000