The Shirt Shop had the following transactions for T-shirts for Year 1, its first year of operations: January 20 April 21 July 25 410 units 130 units 230 units 80 units September 19 During the year, The Shirt Shop sold 680 T-shirts for $20 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. b. Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions. Purchased Purchased Purchased Purchased @ @ e e $12 $13 = $14 = $15 = $4,920 1,690 3,220 1,200

3. CONCEPTUAL CONNECTION Suppose 200,000 EERES WEIC pro sold) but that the company had a beginning finished goods inventory of 10,000 tents produced in the prior year at $40 per unit. The company follows a first-in, first-out policy for its inventory (meaning that the units produced first are sold first for purposes of cost flow). What effect does this have on the income statement? Show the new statement. Problem 2-55 Cost of Goods Manufactured, Cost of Goods Sold Hayward Company, a manufacturing firm, has supplied the following information from its ac- counting records for the month of May: Direct labor cost $10,500 Material handling $ 3,750 Purchases of raw materials 3,475 Materials inventory, May 1 Work-in-process inventory, May 1 Finished goods inventory, May 1 Materials inventory, May 31 Work-in-process inventory, May 31 Finished goods inventory, May 31 15,000 Supplies used Factory insurance Commissions paid Factory supervision Advertising 675 12,500 350 6,685 2,500 9,500 2,225…

During the year, Wright Company sells 320 remote-control airplanes for $100 each. The company has the following inventory purchase transactions for the year.   Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory   50   $ 72   $ 3,600     May. 5 Purchase   200     75     15,000     Nov. 3 Purchase   100     80     8,000           350         $ 26,600         Calculate ending inventory and cost of goods sold for the year, assuming the company uses weighted-average cost. (Round your average cost per unit to 4 decimal places.)   eighted Average Cost Cost of Goods Available for Sale Cost of Goods Sold − Weighted Average Cost   Ending Inventory − Weighted Average Cost           # of units Average Cost per unit Cost of Goods Available for Sale   # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory Beginning Inventory 50     $3,600           Purchases:…

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