Computing ending inventory and cost of goods sold under FIFO and LIFO cost-flow assumptions.
Cost flow assumptions - FIFO and LIFO using a periodic system. Mower Blowers coy started business on Jan 20, 2009. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2009 were as follows:
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Blowers
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Mowers
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Jan 21
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20@200
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Feb 3
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40@195
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Feb 28
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30 @190
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Mar 13
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20@190
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Apr 6
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20@120
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May 22
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40@215
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Jun 3
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40@220
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Jun 20
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60@230
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Aug 15
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20@215
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Sep 20
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20@210
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Nov 7
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20@200
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In inventory at Dec 31, 2009, 10 blowers and 25 mowers. Assume the coy uses a period inventory system. What will be the difference between ending inventory valuation at December 31, 2009, and the cost of goods sold for 2009, under FIFO and LIFO cost-flow assumptions? Hint: Compute ending inventory and cost of goods sold under each method, and then compare results.