Question

JUNS Displayed Dew. The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations: Jan. 20Purchased Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased 400 units 200 units 280 units 90 units EDED $ 8 - $10 = $13 = $15 = $3,200 2,000 3,640 1,350 During the year. The Shirt Shop sold 810 T-shirts for $20 each. Exercise 5-20 Part a Required a. Compute the amount of ending inventory The Shift Shop would report on the balance sheet, assuming the following cost flow assumptions: FFOIL Follandys) weighted average Round intermediate calculations to 2 decimal praces and inal answers to the nearest whole dollar amount. FIFO LIFO Weight

Answer 1

Answer a.

Cost of Goods Sold Ending Inventory FIFO Cost of Goods Available for Sale Cost of Goods # of units Cost per Available for unit Sale # of units Cost per unit Cost of Goods Sold # of units Cost per unit Ending Inventory 8.00 Purchases: January 20 April 21 July 25 September 19 Total 400 200 280 8.00 10.00 13.00 15.00 3200 2000 3640 1350 10190 400 200 210 10.00 13.00 15.00 3200 2000 2730 0 0 70 8.00 10.00 13.00 15.00 0 910 1350 2260 90 970 810 7930 Cost of Goods Sold Ending Inventory LIFO Cost of Goods Available for Sale Cost of Goods Cost per # of units Available for unit Sale Cost per # of units Cost per unit Cost of Goods Sold # of units Ending Inventory unit 400 100 1280 160 0 0 200 Purchases: January 20 April 21 July 25 September 19 Total 8.00 10.00 13.00 15.00 3200 2000 3640 1350 10190 240 200 280 90 810 8.00 10.00 13.00 15.00 280 90 970 1920 2000 36400 1350 8910 8.00 10.00 13.00 15.00 L 0 160 1280 Cost of Goods Sold Average Cost Cost of Goods Available for Sale Cost of Goods Cost per # of units Available for unit Sale Cost per Cost of Goods Sold Ending Inventory Cost per Ending # of units unit Inventory # of units 400 200 Purchases: January 20 April 21 July 25 September 19 Total 280 8.00 10.00 13.00 15.00 10.51 3200 2000 3640 1350 10190 90 970 810 10.51 8513 160 10.51 1677

Answer b.

Sales = Units sold * Selling price per unit
Sales = 810 * $20.00
Sales = $16,200

FIFO:

Gross Profit = Sales - Cost of Goods Sold
Gross Profit = $16,200 - $7,930
Gross Profit = $8,270

LIFO:

Gross Profit = Sales - Cost of Goods Sold
Gross Profit = $16,200 - $8,910
Gross Profit = $7,290

Weighted Average:

Gross Profit = Sales - Cost of Goods Sold
Gross Profit = $16,200 - $8,513
Gross Profit = $7,687