Question

Mower-Blower Sales Co. started business on January 20, 2019. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2019 were as follows: Mowers Blowers 15$ 207 47191 33@ 189 24 185 January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 2e August 15 September 20 November 7 19 $21e 48 216 38 219 70 235 19 216 19 219 23207 The December 31, 2019, inventory Included 7 blowers and 23 mowers. Assume the company uses a periodic Inventory system. Required: 2-1. Compute ending Inventory valuation at December 31, 2019, under the FIFO and LIFO cost flow assumptions. FIFO LIFO Blowers Mowers 2-2. Is there any difference in valuation under FIFO and LIFO. Yes O No b. If the cost of mowers had increased to $247 each by December 1, and if management had purchased 30 mowers at that time and if It wants to minimize taxes, which cost flow assumption was probably being used by the firm? OLIFO O FIFO

Answer 1

Requirement (al) FIFO Blowers $ Movers $ LIFO 1,449 4,854 $ 1449 4,854 Note : Blowers Movers FIFO 7*207 19*210+4*216 LIFO 7*207 19*210+4*216 Requirement (2) No Requirement (a3) LIFO Note : Do Comment For Any Further Assistance