Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1

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The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:

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: = = Jan. 20 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased 310 units 150 units 210 units 90 units @ $ 7 @ $ 9 @ $ 10 @ $ 12 $2,170 1,350 2,100 1,080 = During the year, The Shirt Shop sold 560 T-shirts for $17 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. (Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.) FIFO LIFO Weighted Average Ending inventory Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. FIFO LIFO Difference Gross margin