The Shirt Shop had the following transactions for T-shirts for 2016, its first year of operations:
During the year, The Shirt Shop sold 810 T-shirts for $30 each.
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. Record the above transactions in general journal form and post to T-accounts assuming
(1) FIFO,
(2) LIFO, and
(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 flow assumptions.

  • CreatedApril 20, 2015
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