Question

The Shirt Shop had the following transactions for T-shirts for 2018, its first year of operations:

Jan. 20	Purchased	440	units	@	$	9	=	$	3,960
Apr. 21	Purchased	150	units	@	$	10	=		1,500
July 25	Purchased	240	units	@	$	11	=		2,640
Sept. 19	Purchased	80	units	@	$	12	=		960

During the year, The Shirt Shop sold 720 T-shirts for $17 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. (Round intermediate calculations to 2 decimal places and final answers to nearest whole dollar amount.)
  

Answer 1

	Units	Unit cost	Total
Jan. 20	440	9	3960
Apr. 21	150	10	1500
July 25	240	11	2640
Sept. 19	80	12	960
Total	910		9060
Ending inventory units	190	=910-720
Average cost	9.96
a
Amount of ending inventory :
FIFO	2170	=(80*12)+(190-80)*11
LIFO	1710	=190*9
Weighted average	1892	=190*9.96