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:

January 20	Purchased 300 units @ $5 =	$ 1,500
April 21	Purchased 110 units @ $6 =	660
July 25	Purchased 240 units @ $7 =	1,680
September 19	Purchased 60 units @ $8 =	480

During the year, The Shirt Shop sold 510 T-shirts for $13 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.