Problem: Module 2 Textbook Problem 10 Learning Objective: Module 2-7 Show how different inventory cost flow methods (specific identification, FIFO, LIFO, and weighted average) affect financial statements 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 400 units @ 90 units @ 250 units 60 units $ 4- $5- $7 = $9- During the year. The Shirt Shop sold 650 T-shirts for $14 each. Required Gross margin $1,600 450 1,750 540 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. FIFO LIFO Difference < Required A Required B >

Problem: Module 2 Textbook Problem 10 Learning Objective: Module 2-7 Show how different inventory cost flow methods (specific identification, FIFO, LIFO, and weighted average) affect financial statements 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 400 units @ 90 units @ 250 units 60 units $ 4- $5- $7 = $9- During the year. The Shirt Shop sold 650 T-shirts for $14 each. Required Gross margin $1,600 450 1,750 540 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. Complete this question by entering your answers in the tabs below. Required A Required B Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. FIFO LIFO Difference < Required A Required B >

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Description: Problem: Module 2 Textbook Problem 10Learning Objective: Module 2-7 Show how different inventory cost flow methods (specific identification, FIFO, LIFO, and weightedaverage) affect financial statementsThe Shirt Shop had the following transactions fo

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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7:25SW YO □ Learning Objectives 2, 3 2. Ending Merch. Inv. $73 Dec. 1 Beginning merchandise inventory Assume that Toys Galore store bought and sold a line of dolls during December as follows: 8 Sale 14 Purchase 21 Sale QAA C 363/ 1480 13 units @ $9 each 8 units @ $ 22 each 16 units @ $ 14 each 5G 71% 14 units @ $22 each Requirements 1. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method. 2. Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method. 3. Which method results in a higher cost of goods sold? 4. Which method results in a higher cost of ending merchandise inventory? 5. Which method results in a higher gross profit? GO ||| 0 <
Cornerstone Exercise 6-25 Effects of Inventory Costing Methods Filimonov Inc. has the following information related to purchases and sales of one of its inventory items: Date Description Units Purchased at Cost Units Sold at Retail June 1 Beginning Inventory 200 units @ $10 = $2,000 300 units @ $12 = $3,600 9 Purchase 1 400 units @ $25 14 Sale 1 22 Purchase 2 250 units @ $14 = $3,500 29 Sale 2 225 units @ $25 Required: 1. In a period of rising prices, which inventory costing method produces the highest amount for ending inventory? 2. In a period of rising prices, which inventory costing method produces the highest net income? 3. In a period of rising prices, which inventory costing method produces the lowest payment for income taxes? 4. In a period of rising prices, which inventory method generally produces the most realistic amount for cost of goods sold? In a period of rising prices, which inventory method generally produces the most realistic amount for inventory? Would your answer…
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Question Content Area Boxwood Company sells blankets for $33 each. The following information was taken from the inventory records during May. The company had no beginning inventory on May 1. Boxwood uses a perpetual inventory system. Date Blankets Units Cost May 3 Purchase 8 $18 10 Sale 3 17 Purchase 11 $16 20 Sale 6 23 Sale 3 30 Purchase 9 $20 Determine the May 31 inventory balance using the FIFO inventory costing method. a. $288 b. $256 c. $320 d. $292
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