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Mower-Blower Sales Company started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2022 were as follows: January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 20 August 15 September 20 November 7 Blowers 24 @ $196 49 @ $190 28 @ $189 25@ $199 Mowers 17 @ $201 31 @ $213 38 @ $224 54 @ $234 18 @ $213 17 @ $201 16 @ $196 The December 31, 2022, inventory included 10 blowers and 22 mowers. Assume the company uses a periodic inventory system. Required: a. 1. Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. 2. Is there any difference in valuation under FIFO and LIFO. b. If the cost of mowers had increased to $241 each by December 26th, and if management had purchased 30 mowers just before the end of the year, which cost flow assumption was probably being used by the firm?

Mower-Blower Sales Company started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2022 were as follows: January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 20 August 15 September 20 November 7 Blowers 24 @ $196 49 @ $190 28 @ $189 25@ $199 Mowers 17 @ $201 31 @ $213 38 @ $224 54 @ $234 18 @ $213 17 @ $201 16 @ $196 The December 31, 2022, inventory included 10 blowers and 22 mowers. Assume the company uses a periodic inventory system. Required: a. 1. Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. 2. Is there any difference in valuation under FIFO and LIFO. b. If the cost of mowers had increased to $241 each by December 26th, and if management had purchased 30 mowers just before the end of the year, which cost flow assumption was probably being used by the firm?

FINANCIAL ACCOUNTING
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 Company started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2022 were as follows: January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 20 August 15 September 20 November 7 Blowers 24 @ $196 49 @ $190 28 @ $189 25 @ $199 16 @ $196 Mowers Req A1 Req A2 and B Blowers Mowers 17 @ $201 31 @ $213 The December 31, 2022, inventory included 10 blowers and 22 mowers. Assume the company uses a periodic inventory system. 38 @ $224 54 @ $234 Required: a. 1. Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. 2. Is there any difference in valuation under FIFO and LIFO. b. If the cost of mowers had increased to $241 each by December 26th, and if management had purchased 30 mowers just before the end of the year, which cost flow assumption was probably being used by the firm? 18 @ $213 17 @ $201 Complete this question by entering your answers in the tabs below. FIFO $ 25,457 $ 33,937 Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. LIFO Show less A
Transcribed Image Text:Mower-Blower Sales Company started business on January 20, 2022. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2022 were as follows: January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 20 August 15 September 20 November 7 Blowers 24 @ $196 49 @ $190 28 @ $189 25 @ $199 16 @ $196 Mowers Req A1 Req A2 and B Blowers Mowers 17 @ $201 31 @ $213 The December 31, 2022, inventory included 10 blowers and 22 mowers. Assume the company uses a periodic inventory system. 38 @ $224 54 @ $234 Required: a. 1. Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. 2. Is there any difference in valuation under FIFO and LIFO. b. If the cost of mowers had increased to $241 each by December 26th, and if management had purchased 30 mowers just before the end of the year, which cost flow assumption was probably being used by the firm? 18 @ $213 17 @ $201 Complete this question by entering your answers in the tabs below. FIFO $ 25,457 $ 33,937 Compute ending inventory valuation at December 31, 2022, under the FIFO and LIFO cost flow assumptions. LIFO Show less A
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