Question

The Shirt Shop had the following transactions for T-Shirt for 2018, its first year of operations:

Jan. 20 Purchased 400 units @ $8 = $3,200

Apr. 21 Purchased 200 units @ $10 = $2,000

July 25 Purchased 280 Units @ $13 = $3,640

Sept. 19 Purchased 90 Units @ $15 = $1,350

- During this year The Shirt Shop sold 810 T-shirst for $20 each

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, 3). Weighted Average, rounded two decimal places.

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

Answer 1