Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the 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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:
Jan. 20 Purchased
Apr. 21
Purchased
July 25
Purchased
Sept. 19
Purchased
490 units
110 units
250
units
90 units
G) (S) ) S
Required A Required B
64
8 =
$10
$12
$13
-
$3,920
1,100
3,000
1,170
During the year, The Shirt Shop sold 760 T-shirts for $18 each.
Required
a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average.
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
Answer is not complete.
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Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the following
assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round intermediate calculations to 2 decimal places a

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