Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5- 6 The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased Required 480 units 140 units 240 units 100 units $11 = $5,280 $13= 1,820 3,600 1,600 $15 = $16 = During the year. The Shirt Shop sold 800 T-shirts for $21 each.

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Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-
6
The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:
Jan. 20 Purchased
Apr. 21 Purchased
July 25 Purchased
Sept. 19
Purchased
During the year. The Shirt Shop sold 800 T-shirts for $21 each..
Required
Required A
480 units
140 units
240 units
100 units
a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
Complete this question by entering your answers in the tabs below.
Required B
Ending inventory
@ $11 =
@ $13 =
@ $15 =
@ $16 =
FIFO
Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and final
answers to the nearest whole dollar amount.)
$5,280
1,820
3,600
1,600
LIFO
$ 1,760
Weighted
Average
Transcribed Image Text:Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5- 6 The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: Jan. 20 Purchased Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased During the year. The Shirt Shop sold 800 T-shirts for $21 each.. Required Required A 480 units 140 units 240 units 100 units a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Complete this question by entering your answers in the tabs below. Required B Ending inventory @ $11 = @ $13 = @ $15 = @ $16 = FIFO Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) $5,280 1,820 3,600 1,600 LIFO $ 1,760 Weighted Average
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