Jan. 20 Apr. 21 July 25 Purchased Purchased Purchased Sept. 19 Purchased 330 units 80 units 220 units 70 units $ 4 = $1,320 $ 6 = $ 8 $10 = 480 1,760 700 During the year, The Shirt Shop sold 530 T-shirts for $15 each. 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. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
Jan. 20 Apr. 21 July 25 Purchased Purchased Purchased Sept. 19 Purchased 330 units 80 units 220 units 70 units $ 4 = $1,320 $ 6 = $ 8 $10 = 480 1,760 700 During the year, The Shirt Shop sold 530 T-shirts for $15 each. 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. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Jan. 20
Purchased
Purchased
Purchased
Sept. 19 Purchased
330 units
80 units
220 units
70 units
@
$6 =
$ 8 =
$1,320
480
1,760
700
4 =
Apr. 21
July 25
@
$10 =
During the year, The Shirt Shop sold 530 T-shirts for $15 each.
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.
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
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