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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 Apr. 21 July 25 Sept. 19 Purchased Purchased Purchased Purchased 330 units 150 units 240 units 60 units @ @ $ 7 - S8 - $10 - $12- $2,310 1.200 2,400 720 During the year, The Shirt Shop sold 620 T-shirts for $17 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 answer to the nearest whole dollar amount. FIFO LIFO Weighted Average Ending inventory

Answer 1

SOLUTION : A
FIFO METHDO
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
Purchases:
Jan, 20	Purchases	330	$                7.00	$2,310	330	$           7.00	$2,310
Apr, 21	Purchases	150	$                8.00	$1,200	150	$           8.00	$1,200
July, 25	Purchases	240	$             10.00	$2,400	140	$         10.00	$1,400	100	$         10.00	$1,000
Sept, 19	Purchases	60	$             12.00	$720				60	$         12.00	$720
	Total	780		$6,630	620		$4,910	160		$1,720
LIFO METHDO
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
Purchases:
Jan, 20	Purchases	330	$                7.00	$2,310	170	$           7.00	$1,190	160	$           7.00	$1,120
Apr, 21	Purchases	150	$                8.00	$1,200	150	$           8.00	$1,200
July, 25	Purchases	240	$             10.00	$2,400	240	$         10.00	$2,400
Sept, 19	Purchases	60	$             12.00	$720	60	$         12.00	$720
	Total	780		$6,630	620		$5,510	160		$1,120
Average Cost Method
		COST OF GOODS AVAILABLE FOR SALE			COST OF GOODS SOLD			ENDING INVENTORY
Date	Particulars	No. of Units	Cost Per unit	Total	No. of Units	Cost Per unit	Cost of Goods Sold	No. of Units	Cost Per unit	Ending invetory
Purchases:
Jan, 20	Purchases	330	$                7.00	$2,310
Apr, 21	Purchases	150	$                8.00	$1,200
July, 25	Purchases	240	$             10.00	$2,400
Sept, 19	Purchases	60	$             12.00	$720	620	$           8.50	$5,270	160	$           8.50	$1,360
	Total	780	$8.50	$6,630	620		$5,270	160		$1,360
ANSWER = A)		FIFO	LIFO	Weighted Average Method
	Ending inventory	$1,720	$1,120	$1,360
SOLUTION : B
	CALCULATION OF GROSS MARGIN OF FIFO AND LIFO
		FIFO	LIFO
	Sales Revenue (620 X $ 17)	$10,540	$10,540
	Less: Cost of Goods Sold	$4,910	$5,510
	Gross Margin	$5,630	$5,030
Answer = B
		FIFO	LIFO	Difference
	Gross Margin	$5,630	$5,030	$600