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

Jan. 20	Purchased	330	units	@	$	4	=	$	1,320
Apr. 21	Purchased	80	units	@	$	6	=		480
July 25	Purchased	220	units	@	$	8	=		1,760
Sept. 19	Purchased	70	units	@	$	10	=		700

During the year, The Shirt Shop sold 530 T-shirts for $15 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.