The Shirt Shop had the following transactions for T$-$shirts for Year $1,$ its first year of operations:

January $20$ Purchased $330$ units @ $$7=$ $$2,310$

April $21$ Purchased $150$ units @ $$8=1,200$

July $25$ Purchased $240$ units @ $$10=2,400$

September $19$ Purchased $60$ units @ $$12=720$

During the year, The Shirt Shop sold $620$ T$-$shirts for $$17$ each.

Required

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.

Compute the difference in gross margin between the FIFO and LIFO cost flow assumptions.

Answer rating: 100% (QA)

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