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! Required information Exercise 5-5(Algo) Effect of inventory cost flow on ending inventory balance...

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Accounting

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Required information
Exercise 5-5(Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1
[The following information applies to the questions displayed below.]
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 630 T-shirts for $21 each. Exercise 5-5(Algo) Part a
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.
Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Exercise 5-5(Algo) Part b
b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.
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