f2 ! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 390 units @ $3 = Purchased 110 units @ $4 = Purchased 230 units @ $6 = Purchased 90 units @ $8 = During the year, The Shirt Shop sold 620 T-shirts for $13 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the Gross margin $ FIFO 5,730 LIFO $ 1,170 440 Difference 1,380 720 and LIFO cost flow assumptions.

f2 ! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 390 units @ $3 = Purchased 110 units @ $4 = Purchased 230 units @ $6 = Purchased 90 units @ $8 = During the year, The Shirt Shop sold 620 T-shirts for $13 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the Gross margin $ FIFO 5,730 LIFO $ 1,170 440 Difference 1,380 720 and LIFO cost flow assumptions.

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Description: Gross Margin f2!Required informationExercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1[The following information applies to the questions displayed below.]The Shirt Shop had the following transaction

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Inventories

Section: Chapter Questions

Problem 6.3BE: Perpetual inventory using LIFO Beginning inventory, purchases, and sales for Item 88-HX are as...

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Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 September 19 Purchased 330 units @ $10 = Purchased 80 units @ $11 = Purchased 210 units @ $13 = Purchased 60 units @ $14 = During the year, The Shirt Shop sold 520 T-shirts for $19 each. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Gross margin FIFO LIFO $ 3,300 880 2,730 840 Difference
! Required information Exercise 5-5 (Algo) Effect of inventory cost flow on ending inventory balance and gross margin LO 5-1 [The following information applies to the questions displayed below.] The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20, purchased 330 units @ $12 = $3,960. April 21, purchased 140 units @ $13 = $1,820. July 25, purchased 250 units @ $ 14 = $3500. September 19, purchased 90 units @ $16 = $1,440. During the year, The Shirt Shop sold 630 T- shirts for $21 each.Exercise 5-5 (Algo) 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. Note: Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount. Exercise 5-5 (Algo) Part b b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.…