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Required information

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

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

During the year, The Shirt Shop sold $630$ T$-$shirts for $$21$ 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. Exercise $5-5($Algo$)$ Part b

b$.$ Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.