Inventory valuation and cost of goods sold

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Reference no: EM1310775

Difference between ending inventory valuation and cost of goods sold.

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:

	Blowers	Mowers
Jan 21	20@200
Feb 3	40@195
Feb 28	30 @190
Mar 13	20@190
Apr 6		20@120
May 22		40@215
Jun 3		40@220
Jun 20		60@230
Aug 15		20@215
Sep 20		20@210
Nov 7	20@200

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.

Reference no: EM1310775

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