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454 SECTION 2 Assets Ethics Case 8-7 In 2020, the Moncrief Company purchased from Jim Lester the right to be the sole distributor in the western states Profit of a product called Zelenex. In payment, Moncrief agreed to pay Lester 20% of the gross profit recognized from manipulation the sale of Zelenex in 2021. LO8-4 Moncrief reports inventory using the periodic LIFO assumption. Late in 2021, the following information is available concerning the inventory of Zelenex: Beginning inventory 1/1/2021 (10,000 units a $30) $ 300,000 Purchases (40,000 units o $30) 1,200,000 Soles (35,000 units o $60) 2,100,000 By the end of the year, the purchase price of Zelenex had risen to S40 per unit . On December 28, 2021, three days before year-end, Moncrief is in a position to purchase 20,000 additional units of Zelenex at the S40 per unit price. Due to the increase in purchase price, Moncrief will increase the selling price in 2022 to 580 per unit. Inven tory on hand before the purchase, 15.000 units, is sufficient to meet the next six months' sales and the company does not anticipate any significant changes in purchase price during 2022. Required 1. Determine the effect of the purchase of the additional 20,000 units on the 2021 gross profit from the sale of Zelenex and the payment due to Jim Lester. 2. Discuss the ethical dilemma Moncrief faces in determining whether or not the additional units should be purchased

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