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:BlowersMowersJanuary 2120@$800February 340 @780February 2830760March 1320 @ 760April 620@$840May 22June 3June 20August 15September 204086040880609202086020840November 7 20 @800The December 31, 2016 inventory included 10 blowers and 25 mowers.Assume the company uses a periodic inventory system.Required:Compute ending inventory valuation at December 31, 2016 under:a) FIFOb) LIFO(Hint: Compute ending inventory under each method, and then compareresults.)

Calculations:- Blowers (FIFO): - 10 units @ $800 = $8,000 - Mowers (FIFO): - 20 units @ $840 =…

Answered: Mower-Blower Sales Co. started business…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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: Blowers Mowers January 21 20@$800 February 3 40 @780 February 28 30760 March 13 20 @ 760 April 6 20@$840 May 22 40860 June 3 40 @880 June 20 60920 August 15 20860 September 20 20840 November 7 20@800 The December 31, 2016 inventory included 10 blowers and 25 mowers. Assume the company uses a periodic inventory system. Required: Compute ending inventory valuation at December 31, 2016 under: a) FIFO b) LIFO (Hint: Compute ending inventory under each method, and then compare results.)

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