Mower-Blower Sales Co. started business on January 20, 2013 (A+ Guaranteed)

Problem 1

Mower-Blower Sales Co. started business on January 20, 2013. Products sold were snow blowers and lawn mowers. Each product sold for $350. Purchases during 2013 were as follows:

Blowers       Mowers
January 21    23    @    $    192
February 3    45    @         194
February 28    38    @         190
March 13    19    @         195
April 6                        20    @    $    211
May 22                        50    @         212
June 3                        41    @         218
June 20                        62    @         225
August 15                        19    @         212
September 20                        20    @         211
November 7    16    @         192
________________________________________

In inventory at December 31, 2013, were 8 blowers and 29 mowers. Assume the company uses a periodic inventory system.

Required 1:
(a)    Compute 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.)

The following data are available for Sellco for the fiscal year ended on January 31, 2014:

Problem 2

Sales    840    units
Beginning inventory    280    units    @    $    4
Purchases, in chronological order    300    units    @    $    5
420    units    @    $    7
240    units    @    $    8
________________________________________

Required:
(a)    Calculate cost of goods sold and ending inventory amounts under the cost-flow assumptions, FIFO, LIFO and Weighted average (using a periodic inventory system): (Round your unit cost to 2 decimal places.)

(b)    Assume that net income using the weighted-average cost-flow assumption is $14,400. Calculate net income under FIFO and LIFO. (Round your unit cost to 2 decimal places.)

Here’s the SOLUTION

This entry was posted in Homework Help. Bookmark the permalink.

Comments are closed.