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[The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations: Ja

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

 

The Shirt Shop had the following transactions for T-shirts 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 the year, The Shirt Shop sold 810 T-shirts for $20 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 intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.)

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

 

Sep 12 2020 Read more Less More

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