Silver Sales had the following transactions for T-shirts for 2013, its first year of operations:

During the year, Silver Sales sold 650 T-shirts for $20 each.

Required
a. Compute the amount of ending inventory Silver would report on the balance sheet, assuming the following cost flow assumptions:
(1) FIFO,
(2) LIFO,
(3) Weighted average.
b. Record the above transactions in general journal form and post to T-accounts assuming
(1) FIFO,
(2) LIFO,
(3) Weighted average methods.
Use a separate set of journal entries and T-accounts for each method. Assume all transactions are cash transactions.
c. Compute the difference in gross margin between the FIFO and LIFO cost flowassumptions.

Transcribed Image Text:

Jan. 20 Apr. 21 July 25 Sept. 19 Purchased 350 units@$ 6 Purchased 150 units$8 Purchased 200 units $10 Purchased 80 units $11 $2,100 1,200 2,000 880