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: Purchased 390 units @ $3. Purchased 110 units @ $4 Purchased 230 units @ $6 Purchased 90 units @ $8- January 20 April 21 July 25 September 19 During the year, The Shirt Shop sold 620 T-shirts for $13 each. Exercise 5-5 (Algo) Part a $ 1,170 440 Check m 1,380. 720 Required 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. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.
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: Purchased 390 units @ $3. Purchased 110 units @ $4 Purchased 230 units @ $6 Purchased 90 units @ $8- January 20 April 21 July 25 September 19 During the year, The Shirt Shop sold 620 T-shirts for $13 each. Exercise 5-5 (Algo) Part a $ 1,170 440 Check m 1,380. 720 Required 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. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Topic Video
Question
Please do not give solution in image format thanku
![2
Check my
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
Purchased 390 units @ $3 =
Purchased 110 units @ $4 =
Purchased 230 units @ $6 =
Purchased 98 units @ $8 =
September 19
During the year, The Shirt Shop sold 620 T-shirts for $13 each.
Exercise 5-5 (Algo) Part a
Required
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.
Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.
Ending inventory
FIFO
LIFO
$ 1,170
448
1,380
720
Weighted
Average](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8b403fc-4c6d-476b-99e9-ee7b99c0ff75%2Fd8a65b2e-c05c-446a-8570-e66ca9bd55bd%2Fgka51o_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2
Check my
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
Purchased 390 units @ $3 =
Purchased 110 units @ $4 =
Purchased 230 units @ $6 =
Purchased 98 units @ $8 =
September 19
During the year, The Shirt Shop sold 620 T-shirts for $13 each.
Exercise 5-5 (Algo) Part a
Required
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.
Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.
Ending inventory
FIFO
LIFO
$ 1,170
448
1,380
720
Weighted
Average
![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 390 units @ $3=
Purchased 110 units @ $4=
Purchased 230 units @ $6
Purchased 90 units @ $8 =
During the year, The Shirt Shop sold 620 T-shirts for $13 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
$ 1,170
440
1,380
720
Difference](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff8b403fc-4c6d-476b-99e9-ee7b99c0ff75%2Fd8a65b2e-c05c-446a-8570-e66ca9bd55bd%2Fyfwaion_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 390 units @ $3=
Purchased 110 units @ $4=
Purchased 230 units @ $6
Purchased 90 units @ $8 =
During the year, The Shirt Shop sold 620 T-shirts for $13 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
$ 1,170
440
1,380
720
Difference
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education