Question

Required information

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

Jan. 20	Purchased	490	units	@	$	8	=	$	3,920
Apr. 21	Purchased	290	units	@	$	10	=		2,900
July 25	Purchased	370	units	@	$	13	=		4,810
Sept. 19	Purchased	180	units	@	$	15	=		2,700

During the year, The Shirt Shop sold 1,080 T-shirts for $24 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. (Round cost per unit to 2 decimal places and final answers to the nearest whole dollar amount.)
  

Answer 1

		Units	Rate	Cost
Jan. 20	Purchased	490	8	3920
Apr. 21	Purchased	290	10	2900
July 25	Purchased	370	13	4810
Sept. 19	Purchased	180	15	2700
Total		1330		14330
Less Units Sold		1080
Ending Inventory		250

	FIFO
Sept. 19	Purchased	180	15	2700
July 25	Purchased	70	13	910
Total		250	Value of Ending Inventory	3610

	LIFO
Jan. 20	Purchased	250	8	2000
Total		250	Value of Ending Inventory	2000

weighted average
Average Cost =14330/1330	10.77
Value of Ending Inventory 250*10.77	2693