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[The following information applies to the questions displayed below.] The Shirt Shop had the following...

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Accounting

  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.

January 20 Purchased 600 units @ $ 7 = $4,200
April 21 Purchased 400 units @ $9 = 3,600
July 25 Purchased 480 units @ $12 = 5,760
September 19 Purchased 290 units @ $14 = 4,060

During the year, The Shirt Shop sold 1,410 T-shirts for $23 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.)

Ending Inventory:

FIFO=

LIFO=

WEIGHTED AVG=

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

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