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 810 T-shirts for $20 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, rounded to two decimal places.

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

Transcribed Image Text:

Purchased 400 units @$ 8 Purchased 200 units @ $10 Purchased 280 units @ $13 Purchased 90 units @ $15 $3,200 2,000 3,640 1,350 Jan, 20 Apr. 21 July 25 Sept. 19 I||| || ||