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

Jan. 20	Purchased	400	units	@	$	4	=	$	1,600
Apr. 21	Purchased	90	units	@	$	5	=		450
July 25	Purchased	250	units	@	$	7	=		1,750
Sept. 19	Purchased	60	units	@	$	9	=		540

During the year, The Shirt Shop sold 650 T-shirts for $14 each.

Required

1. 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.
2. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.