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Questions 5-7 (of 7) The Shirt Shop had the Jan. 20 Apr. 21 July 25 Purchased 280 units$133,640 Sept. 19 Purchased 9° units @ $20 = 1,800 400 units o $8 $3,200 Purchased 200 units @ $10 2,000 During the year, The Shirt Shop sold 810 T-shirts for $20 each. 5 value Required 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.) FIFO LIFO

Answer 1

Answer

• Requirement ‘a’

	Ending Inventory
FIFO	$             2,710.00
LIFO	$             1,280.00
Weighted Average	$             1,755.00

• Requirement ‘b’

--Purchase Entries

Date	Accounts title	Debit	Credit
20-Jan	Merchandise Inventory	3200
	Cash		3200
21-Apr	Merchandise Inventory	2000
	Cash		2000
25-Jul	Merchandise Inventory	3640
	Cash		3640
19-Sep	Merchandise Inventory	1800
	Cash		1800

--Other entries

FIFO
Date	Accounts title	Debit	Credit
2016	Cash	16200
	Sales Revenue		16200
2016	Cost of Goods Sold	7930
	Merchandise Inventory		7930
LIFO
Date	Accounts title	Debit	Credit
2016	Cash	16200
	Sales Revenue		16200
2016	Cost of Goods Sold	9360
	Merchandise Inventory		9360
Weighted Average
Date	Accounts title	Debit	Credit
2016	Cash	16200
	Sales Revenue		16200
2016	Cost of Goods Sold	8886
	Merchandise Inventory		8886

• Requirement ‘c’

FIFO
Cash
Beg Bal	0
Sales	16200	3200	Inventory purchased
		2000	Inventory purchased
		3640	Inventory purchased
		1800	Inventory purchased
	$                                      16,200	$                10,640
End Bal	5560
Sales revenue
Beg Bal
		16200	Cash Sale
	$                                               -	$          16,200.00
End Bal		16200
Merchandise Inventory
Beg Bal	0
Cash purchase	3200	7930	Cost of Goods Sold
Cash purchase	2000
Cash purchase	3640
Cash purchase	1800
	$                                10,640.00	$             7,930.00
End Bal	2710
Cost of Goods Sold
Beg Bal	0
Merchandise Inventory	7930
	$                                        7,930	$                          -
End Bal	7930

LIFO
Cash
Beg Bal	0
Sales	16200	3200	Inventory purchased
		2000	Inventory purchased
		3640	Inventory purchased
		1800	Inventory purchased
	$        16,200	$        10,640
End Bal	5560
Sales revenue
Beg Bal
		16200	Cash Sale
	$                 -	$ 16,200.00
End Bal		16200
Merchandise Inventory
Beg Bal	0
Cash purchase	3200	9360	Cost of Goods Sold
Cash purchase	2000
Cash purchase	3640
Cash purchase	1800
	$ 10,640.00	$    9,360.00
End Bal	1280
Cost of Goods Sold
Beg Bal	0
Merchandise Inventory	9360
	$          9,360	$                 -
End Bal	9360

Weighted Average
Cash
Beg Bal	0
Sales	16200	3200	Inventory purchased
		2000	Inventory purchased
		3640	Inventory purchased
		1800	Inventory purchased
	$        16,200	$           10,640
End Bal	5560
Sales revenue
Beg Bal
		16200	Cash Sale
	$                 -	$     16,200.00
End Bal		16200
Merchandise Inventory
Beg Bal	0
Cash purchase	3200	8886	Cost of Goods Sold
Cash purchase	2000
Cash purchase	3640
Cash purchase	1800
	$ 10,640.00	$        8,886.00
End Bal	1754
Cost of Goods Sold
Beg Bal	0
Merchandise Inventory	8886
	$          8,886	$                     -
End Bal	8886