Exercise 5-20A (Algo) Effect of inventory cost flow on ending inventory balance and gross morgin LO 5- 6 The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations $1,600 Jan. 20 Purchased Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased 400 units 130 units 250 units 100 units 780 $8 510 2.000 1,000 During the year, The Shirt Shop sold 720 T-shirts for $15 each 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. 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 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. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) Complete this question by entering your answers in the tabs below. Required A Required B 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. (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.) FIFO UFO Weighted Average Ending inventory @ Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased 400 units 130 units 250 units 100 units $4 $6 S8 = $10 $1,600 780 2,000 1,080 During the year. The Shirt Shop sold 720 T-shirts for $15 each 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 b. Compute the difference in gross margin between the FIFO and UFO 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, LIFO FIFO Difference Gross margin