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 $ 1,600 April 21 780 Purchased 400 units @ $4 = Purchased 130 units @ $6 = Purchased 250 units @ $8 = Purchased 100 units @ $10 = July 25 September 19 2,000 1,000 During the year, The Shirt Shop sold 720 T-shirts for $15 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 Weighted Average
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 $ 1,600 April 21 780 Purchased 400 units @ $4 = Purchased 130 units @ $6 = Purchased 250 units @ $8 = Purchased 100 units @ $10 = July 25 September 19 2,000 1,000 During the year, The Shirt Shop sold 720 T-shirts for $15 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 Weighted Average
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please do not give solution in image format thanku

Transcribed Image Text:Exercise 5-5 (Algo) Part b
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
Gross margin
FIFO
LIFO
Difference
![!
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 400 units @ $4 =
Purchased 130 units @ $6 =
Purchased 250 units @ $8 =
Purchased 100 units @ $10 =
During the year, The Shirt Shop sold 720 T-shirts for $15 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
$ 1,600
780
2,000
1,000
Weighted
Average](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F659fb910-117f-4c33-a9e0-29d3ad7fdc50%2F59ccb68e-b6c8-4b3d-9c9e-daaa25cae49b%2F7pel2j7_processed.png&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 400 units @ $4 =
Purchased 130 units @ $6 =
Purchased 250 units @ $8 =
Purchased 100 units @ $10 =
During the year, The Shirt Shop sold 720 T-shirts for $15 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
$ 1,600
780
2,000
1,000
Weighted
Average
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