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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.

FINANCIAL ACCOUNTING
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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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.
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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