Question

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. 20Purchased Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased 370 units 140 units 220 units 100 units $12 $13 - $15 $16 - $4,440 1,820 3.300 1,600 During the year, The Shirt Shop sold 690 T-shirts for $21 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 answers to nearest whole dollar amount.) FIFO LIFO Weighted Average Ending inventory

Answer 1

	Units	Unit cost	Total
Jan. 20	370	12	4440
Apr. 21	140	13	1820
July 25	220	15	3300
Sept. 19	100	16	1600
Total	830		11160
Average cost	13.45	=11160/830
Ending inventory units	140	=830-690
a
Ending inventory:
FIFO	2200	=(100*16)+(140-100)*15
LIFO	1680	=140*12
Weighted average	1883	=140*13.45
b
Sales revenue	14490	=690*21
Cost of goods sold:
FIFO	8960	=11160-2200
LIFO	9480	=11160-1680
	FIFO	LIFO	Difference
Sales revenue	14490	14490
Less: Cost of goods sold	8960	9480
Gross margin	5530	5010	520

Answer 2

Summary of Purchase Transactions
Beginning   Inventory		370	@	12	=	4,440
First Purchase		140	@	13	=	1,820
Second Purchase		220	@	15	=	3,300
third Purchase		100	@	16	=	1,600
Total		830				11,160
units sold		690		21		14,490
ending inventory		140
FIFO
		370	@	$           12	=	$        4,440
0		140	@	$             13	=	$          1,820
		180	@	$             15	=	$          2,700
		0	@	$               -	=	$                -
Total		690				$        8,960
Ending Inventory		40	@	$           15	=	$            600
		100	@	$             16	=	$          1,600
Total		140				$          2,200
LIFO
COGS
		100	@	$           16	=	$        1,600
		220	@	$             15	=	$          3,300
0		140	@	$             13	=	$          1,820
		230	@	$             12	=	$          2,760
Total		690				$          9,480
Ending Inventory
		140	@	$           12	=	$        1,680
Weighted Avg.
Total cost		/		Total Units	=	Cost/unit
$                                                           11,160				$         830		$        13.45
		Units		Cost/unit
COGS		690	@	$     13.45	=	$        9,278
Ending Inventory		140		$       13.45	=	$          1,882
	Sales revenue	$              690		$                    21		$                14,490
	Gross margin	FIFO		$              5,530
		Difference				$                      520
	Gross margin	LIFO		$              5,010
	Gross margin	Weighted Avg.		$              5,212