Question

1. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the FIFO cost flow assumption.
   Required information [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 Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased 400 units 150 units 200 units 100 units @ @ @ @ $ 8 = $3,200 $10 = 1,500 $12 = 2,400 $14 = 1,400 During the year, The Shirt Shop sold 650 T-shirts for $19 each. Required a. Compute the amount of ending inventory The Shirt Shop would report on the balance sheet, assuming the FIFO cost flow assumption. FIFO Ending inventory
   

Answer 1

Data & Calculation z 650 less units sold E quan'lable for sale. 400+150+ 200+100 2 850 units in ending Inventory 200 Trifo method as the nome suggests first in Pronst out the units purchased first are supposed to be sold first, so the ending Inventory is from the most recent Pur Chales. Recent Purchase at Sept19 100 units X $ 14 S 1400 Remaing 100 units from July 25 100 unity X 8 12 = $ 1200_ I cost of 2000nity in Ending Inventory $ 2600 There are 200 unith in ending inventory 100 units from last Purchase i.e. sept 19 as the Lunit exhaust in last purchal we go to units prior to last Purchase Remaining 100 units are from purchase of July 2.5. Cost of ending inventory under FI FO method is 82000 Thank You