Question

The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations:

Jan. 20	Purchased	590	units	@	$	8	=	$	4,720
Apr. 21	Purchased	390	units	@	$	10	=		3,900
July 25	Purchased	470	units	@	$	13	=		6,110
Sept. 19	Purchased	280	units	@	$	15	=		4,200

During the year, The Shirt Shop sold 1,380 T-shirts for $24 each.

Exercise 5-5A 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. (Round cost per unit to 2 decimal places and final answers to the nearest whole dollar amount.)

Answer 1

Answer :- FIFO method :- for sale = 590 + 340+4970 + 280 Units available = 1730 units Units sold = 1380 17 .: Units on Ending inventory = = 350 units .. amount of ending inventory = (280+ $15) + (to x$ 13) - $ 5110 LIFO melod: 350 x $ 8 Amount of Ending inventory = = $2800 (3) Weighted. questage method AU 29199e cost per unit Total cost Unis available for sale $4720+ $ 3900+ $6110+ $4200 1730 - $18930 1730 = $10.94 perunt - Amount of ending inventony = 350 units X $ (0.94 = $3829 = =