Required informationExercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1[The following information applies to the questions displayed below.]The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:$ 1,600450January 20April 21July 25September 19Purchased 400 units @ $4 =Purchased 90 units @ $5Purchased 250 units @ $7Purchased 60 units @ $9 =1,750540During the year, The Shirt Shop sold 650 T-shirts for $14 each.Exercise 5-5 (Algo) Part bb. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.Gross marginFIFO=LIFODifference

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Description: Required informationExercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1[The following information applies to the questions displayed below.]The Shirt Shop had the following transactions for T-shirts

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Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: $ 1,600 January 20 April 21 July 25 Purchased 400 units @ $4= Purchased 90 units @ $5 = Purchased 250 units @ $7 = Purchased 60 units @ $9 = 450 1,750 540 September 19 During the year, The Shirt Shop sold 650 T-shirts for $14 each.

Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: $ 1,600 January 20 April 21 July 25 Purchased 400 units @ $4= Purchased 90 units @ $5 = Purchased 250 units @ $7 = Purchased 60 units @ $9 = 450 1,750 540 September 19 During the year, The Shirt Shop sold 650 T-shirts for $14 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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Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 330 units @ $10 = Purchased 80 units @ $11 = Purchased 210 units @ $13 = Purchased 60 units @ $14 = During the year, The Shirt Shop sold 520 T-shirts for $19 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Gross margin FIFO LIFO $ 3,300 880 2,730 840 Difference
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