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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 $ 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

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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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
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
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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