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: Blowers Mowers January 21 15 @ $ 209 February 3 50 @ 196 February 28 36 @ 184 March 13 20 @ 184 April 6 16 @ $ 214 May 22 50 @ 218 June 3 44 @ 217 June 20 54 @ 232 August 15 19 @ 218 September 20 16 @ 214 November 7 17 @ 209 The December 31, 2019, inventory included 9 blowers and 21 mowers. Assume the company uses a periodic inventory system.

Required: a-1. Compute ending inventory valuation at December 31, 2019, under the FIFO and LIFO cost flow assumptions.

a-2. Is there any difference in valuation under FIFO and LIFO.

b. If the cost of mowers had increased to $240 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?

LIFO FIFO