Cost flow assumptions€”FIFO and LIFO using a periodic system Mower-Blower Sales Co. started business on January 20, 2013. Products sold were snow blowers and lawn mowers. Each product sold for $700. Purchases during 2013 were as follows:

The December 31, 2013, inventory included 10 blowers and 25 mowers. Assume the company uses a periodic inventory system.

Required:
a. What will be the difference between ending inventory valuation at December 31, 2013, under the FIFO and LIFO cost flow assumptions? (Hint: Compute ending inventory under each method, and then compare results.)
b. If the cost of mowers had increased to $480 each by December 1, and if management had purchased 30 mowers at that time, which cost flow assumption was probably being used by the firm? Explain youranswer.

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Blowers 20 @ $400 40 390 30@ 380 20@ 380 Mowers January 21 February 3 February 28 March 13 April 6 May 22 June 3 June 20 August 15 September 20 November 7 20 @ $420 40@ 430 40 @ 440 60@ 460 20 430 20 @ 420 20@ 400