Mower-Blower Sales Co. started business on January 20. 2016. Products sold were snow blowers and lawn mowers.

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Mower-Blower Sales Co. started business on January 20. 2016. Products sold were snow blowers and lawn mowers. Each product sold for $1,400. Purchases during 2016 were as follows:

Mower-Blower Sales Co. started business on January 20. 2016. Products

The December 31, 2016, inventory included 10 blowers and 25 mowers. Assume the company uses a periodic inventory system.
Required:
a. What will be the difference between ending inventory valuation at December 31, 2016, under the FIFO and LIFO cost flow assumptions? (Compute ending inventory under each method, and then compare results.)
b. If the cost of mowers had increased to $960 each by December I. and if management had purchased 30 mowers at that time, which cost flow assumption was probably being used by the firm? Explain your answer.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula                Ending Inventory Formula =...
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Related Book For  book-img-for-question

Accounting What the Numbers Mean

ISBN: 978-1259535314

11th edition

Authors: David Marshall, Wayne McManus, Daniel Viele

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