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Cowboy Ice Cream Company (CIC) had the following purchases of ice cream bars for Year...

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Accounting

Cowboy Ice Cream Company (CIC) had the following purchases of ice cream bars for Year 1 of operations:

Jan. 20 Purchased 490 units @ $ 8 = $ 3,920
Apr. 21 Purchased 130 units @ $ 9 = 1,170
July 25 Purchased 240 units @ $ 11 = 2,640
Sept. 19 Purchased 80 units @ $ 13 = 1,040

During the year, CIC sold 780 ice cream bars for $18 each.

Required

  1. Compute the amount of ending inventory CIC 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.

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