# Required information Exercise 5-20 Effect of inventory cost flow on ending inventory balance and gross margin...

###### Question:

Required information Exercise 5-20 Effect of inventory cost flow on ending inventory balance and gross margin LO 5-6 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 Purchased Apr. 21 Purchased July 25 Purchased Sept. 19 Purchased 400 units 90 units 250 units 60 units @ @ @ @ $4 =$1,600 $5 = 450$ 7 = 1,750 $9 = 540 During the year, The Shirt Shop sold 650 T-shirts for$14 each.
Exercise 5-20 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 intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount. FIFO LIFO Weighted Average Ending inventory
Exercise 5-20 Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. FIFO LIFO Difference Gross margin

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