Question

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.


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  • CreatedOctober 26, 2013
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