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 201 April 21 July 25 Purchased 440 units @ $9- e Purchased 130 units @ $11- Purchased 240 units $12 = September 19 Purchased 70 units @ $13- During the year, The Shirt Shop sold 710 T-shirts for $18 each. $ 3,960 1,430 2,880 910
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 201 April 21 July 25 Purchased 440 units @ $9- e Purchased 130 units @ $11- Purchased 240 units $12 = September 19 Purchased 70 units @ $13- During the year, The Shirt Shop sold 710 T-shirts for $18 each. $ 3,960 1,430 2,880 910
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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 440 units @ $9-
Purchased 130 units @ $11-
Purchased 240 units @ $12 -
Purchased 70 units @ $13-
During the year, The Shirt Shop sold 710 T-shirts for $18 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
$ 3,960
1,430
2,880
910
Weighted
Average](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb4a77155-f926-48a9-a261-c8a1a2f25525%2F360d3880-dfde-4a55-8ec0-24116b9620f2%2Ftqsifwf_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 440 units @ $9-
Purchased 130 units @ $11-
Purchased 240 units @ $12 -
Purchased 70 units @ $13-
During the year, The Shirt Shop sold 710 T-shirts for $18 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
$ 3,960
1,430
2,880
910
Weighted
Average
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