Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-6The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:Jan. 20 PurchasedApr. 21 PurchasedJuly 25 PurchasedSept. 19PurchasedDuring the year. The Shirt Shop sold 800 T-shirts for $21 each..RequiredRequired A480 units140 units240 units100 unitsa. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flowassumptions: (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 BEnding inventory@ $11 =@ $13 =@ $15 =@ $16 =FIFOCompute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following cost flowassumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places and finalanswers to the nearest whole dollar amount.)$5,2801,8203,6001,600LIFO$ 1,760WeightedAverage

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Description: Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-6The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:Jan. 20 PurchasedApr. 21 PurchasedJuly 25 Purc

Lets understand the basics.Ending inventory and cost of goods sold can be calculated by using,(1)…

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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 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.

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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