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 201 April 21 July 25 September 19, Purchased 400 units @ $4= Purchased 90 units @ $5 = Purchased 250 units @ $7 Purchased 60 units @ $9 During the year, The Shirt Shop sold 650 T-shirts for $14 each. Exercise 5-5 (Algo) Part b $1,600 450 4 1,750 540 b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions Gross margin FIFO LIFO 4,340 Difference